Upload
amos-craig
View
220
Download
0
Tags:
Embed Size (px)
Citation preview
Outline
• What is culture?
• Levels of culture in multinational management
• Cultural models
• Home and host country effects on IHRM
What is culture?
Visible cultural differencesLanguageHousingFoodClothes Key beliefs
Our understandingsabout what is true.
Norms and valuesWhat we can do and
cannot do.
What is right or wrong.
The layers of culture/onion metaphor:
Other metaphors such as iceberg and ocean have also been used.
What is culture? Some definitions:• ‘Culture consists in patterned ways of thinking, feeling and
reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments in artefacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values.’
(Kluckhohn, 1951: 86 cited in Hofstede, 2001: 9)
• ‘the collective programming of the mind that distinguishes the members of one group or category of people from another’
(Hofstede, 2001: 9)
• ‘Culture is the characteristic way of behaving and believing that a group of people in a country or region (or firm) have evolved over time and share.’ (Briscoe and Schuler, 2004: 116)
Levels of culture in multinational management
National Culture
Business Culture
Occupational CultureOrganizational Culture
Multinational Management
(Source: Cullen and Parboteeah, 2008: 49)
Three cultural modelsHofstede’s model of national culture• the first cultural model• introduced by Geert Hofstede in the early 1980s• includes 5 dimensions of culture• has been used extensively to understand cultural differences
Fons Trompenaars and Hampden-Turner’s 7d cultural model• includes 7 dimensions of culture• builds on anthropological approaches to understand culture (humans must solve basic problems of survival)
GLOBAL national culture framework• most recent national culture framework• derives from the Global Leadership and Organisational Behavior
Effectiveness (GLOBE) project• based heavily on Hofstede’s model• includes 9 cultural dimensions
Hofstede’s model of national culture (1)
• based on 116,000 questionnaires from employees of IBM subsidiaries
• conducted in 50 countries and 3 regions (East Africa, West Africa and Arab countries)
• identified 5 dimensions of cultural variation in values
• for each dimension, possible origins, predictors and consequences for management behaviour are presented
Hofstede’s model of national culture (2)• Power distance is the extent to which the less powerful
members of organizations and institutions accept and expect that power is distributed unequally.
• Uncertainty avoidance is the extent to which a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. (Unstructured situations are novel, unknown, surprising, different from usual. )
• Individualism on the one side versus its opposite, collectivism, is the degree to which individuals are supposed to look after themselves or remain integrated into groups, usually around the family.
Source: Hostede (2001: xix) and Hofstede (1985: 348)
Hofstede’s model of national culture (3)
• Masculinity, which stands for a preference for achievement, heroism, assertiveness, and material success; as opposed to femininity, which stands for a preference for relationships, modesty, caring for the weak, and the quality of life.
• Long-term versus short-term orientation refers to the extent to which a culture programs its members to accept delayed gratification of their material, social and emotional needs.
source: Hostede (2001: xix) and Hofstede (1985: 348)
Hofstede’s model of national culture (4)
• High levels of power distance = high levels of formality and elitism
• High levels of uncertainty avoidance = high need for security and fear of the unknown
• High levels of individualism = looser sense of solidarity between people
• High levels of masculinity = high levels of assertiveness and distinction between gender roles
• High level of long-termism = high sense of need to plan for the future
Power DistanceArab World * * 80 Argentina 49 Australia 36 Austria 11 Austria 11 Bangladesh * 80 Belgium 65 Brazil 69 Bulgaria * 70 Canada 39 Chile 63 China * 80 Colombia 67 Costa Rica 35 Czech Republic * 57 Denmark 18 East Africa * * 64 Ecuador 78 El Salvador 66 Estonia * 40 Finland 33 France 68 Germany 35 Greece 60 Guatemala 95 Hong Kong 68 Hungary * 46 I ndia 77 I ndonesia 78 I ran 58 I reland 28 I srael 13 I taly 50 J amaica 45 J apan 54
Luxembourg * 40 Malaysia 104 Malta * 56 Mexico 81 Morocco * 70 Netherlands 38 New Zealand 22 Norway 31 Pakistan 55 Panama 95 Peru 64 Philippines 94 Poland * 68 Portugal 63 Romania * 90 Russia * 93 Singapore 74 Slovakia * 104 South Africa 49 South Korea 60 Spain 57 Surinam * 85 Sweden 31 Switzerland 34 Taiwan 58 Thailand 64 Trinidad * 47 Turkey 66 United Kingdom 35 United States 40 Uruguay 61 Venezuela 81 Vietnam * 70 West Africa 77
Uncertainty avoidanceArab World * * 68 Argentina 86 Australia 51 Austria 70 Austria 70 Bangladesh * 60 Belgium 94 Brazil 76 Bulgaria * 85 Canada 48 Chile 86 China * 30 Colombia 80 Costa Rica 86 Czech Republic * 74 Denmark 23 East Africa * * 52 Ecuador 67 El Salvador 94 Estonia * 60 Finland 59 France 86 Germany 65 Greece 112 Guatemala 101 Hong Kong 29 Hungary * 82 I ndia 40 I ndonesia 48 I ran 59 I reland 35 I srael 81 I taly 75 J amaica 13 J apan 92
Luxembourg * 70 Malaysia 36 Malta * 96 Mexico 82 Morocco * 68 Netherlands 53 New Zealand 49 Norway 50 Pakistan 70 Panama 86 Peru 87 Philippines 44 Poland * 93 Portugal 104 Romania * 90 Russia * 95 Singapore 8 Slovakia * 51 South Africa 49 South Korea 85 Spain 86 Surinam * 92 Sweden 29 Switzerland 58 Taiwan 69 Thailand 64 Trinidad * 55 Turkey 85 United Kingdom 35 United States 46 Uruguay 100 Venezuela 76 Vietnam * 30 West Africa 54
IndividualismArab World * * 38 Argentina 46 Australia 90 Austria 55 Austria 55 Bangladesh * 20 Belgium 75 Brazil 38 Bulgaria * 30 Canada 80 Chile 23 China * 20 Colombia 13 Costa Rica 15 Czech Republic * 58 Denmark 74 East Africa * * 27 Ecuador 8 El Salvador 19 Estonia * 60 Finland 63 France 71 Germany 67 Greece 35 Guatemala 6 Hong Kong 25 Hungary * 80 I ndia 48 I ndonesia 14 I ran 41 I reland 70 I srael 54 I taly 76 J amaica 39 J apan 46
Luxembourg * 60 Malaysia 26 Malta * 59 Mexico 30 Morocco * 46 Netherlands 80 New Zealand 79 Norway 69 Pakistan 14 Panama 11 Peru 16 Philippines 32 Poland * 60 Portugal 27 Romania * 30 Russia * 39 Singapore 20 Slovakia * 52 South Africa 65 South Korea 18 Spain 51 Surinam * 47 Sweden 71 Switzerland 68 Taiwan 17 Thailand 20 Trinidad * 16 Turkey 37 United Kingdom 89 United States 91 Uruguay 36 Venezuela 12 Vietnam * 20 West Africa 20
MasculinityArab World * * 52 Argentina 56 Australia 61 Austria 79 Austria 79 Bangladesh * 55 Belgium 54 Brazil 49 Bulgaria * 40 Canada 52 Chile 28 China * 66 Colombia 64 Costa Rica 21 Czech Republic * 57 Denmark 16 East Africa * * 41 Ecuador 63 El Salvador 40 Estonia * 30 Finland 26 France 43 Germany 66 Greece 57 Guatemala 37 Hong Kong 57 Hungary * 88 I ndia 56 I ndonesia 46 I ran 43 I reland 68 I srael 47 I taly 70 J amaica 68 J apan 95
Luxembourg * 50 Malaysia 50 Malta * 47 Mexico 69 Morocco * 53 Netherlands 14 New Zealand 58 Norway 8 Pakistan 50 Panama 44 Peru 42 Philippines 64 Poland * 64 Portugal 31 Romania * 42 Russia * 36 Singapore 48 Slovakia * 110 South Africa 63 South Korea 39 Spain 42 Surinam * 37 Sweden 5 Switzerland 70 Taiwan 45 Thailand 34 Trinidad * 58 Turkey 45 United Kingdom 66 United States 62 Uruguay 38 Venezuela 73 Vietnam * 40 West Africa 46
Long-term orientationAustralia 31 Bangladesh * 40 Brazil 65 Canada 23 China * 118 Czech Republic * 13 East Africa * * 25 Germany 31 Hong Kong 96 Hungary * 50 I ndia 61 J apan 80 Netherlands 44 New Zealand 30 Norway 20 Philippines 19 Poland * 32 Singapore 48 Slovakia * 38 South Korea 75 Sweden 33 Taiwan 87 Thailand 56 United Kingdom 25 United States 29 Vietnam * 80 West Africa 16
Hofstede’s model of national culture (5)
True or false??
The U.S.A. scores high on individualism, so it is safe to conclude that all Americans are individualists.
• Be cautious in interpreting cultural difference using country scores!!
Management processes
HRM
Management selection
Training
Evaluations/promotion
Remuneration
Management styles
Motivational assumptions
Decision making/ organisational design
(Source: Cullen and Parboteeah, 2008)
Hofstede’s model and management implications (1)
Low Power Distance
Educational achievement
For autonomy
Performance
Small wage difference between management and worker
High Power Distance
Social class; elite education
For conformity/obedience
Compliance; trustworthiness
Large wage difference between management and worker
Participative; less direct supervision
People like work; extrinsic and intrinsic rewards
Centralized; tall pyramids; large proportion of supervisors
Assume people dislike work; coercion
Decentralized; flat pyramids; small proportion of supervisors
Theory X; authoritarian, with close supervision
Management processes High Uncertainty Avoidance
HRM
Management selection Seniority; expected loyalty
Training Specialized
Evaluations/promotion Seniority; expertise; loyalty
Remuneration Based on seniority or expertise
Management styles Task-oriented
Motivational assumptions People seek security, avoid competition
Decision making/ organisational design
Larger organization; tall hierarchy; formalized; many standardized procedures
(Source: Cullen and Parboteeah, 2008)
Hofstede’s model and management implications (2)
Low Uncertainty Avoidance
Past job performance; education
Training to adapt
Objective individual performance data; job switching for promotions
Based on performance
Nondirective; person-oriented; flexible
People are self-motivated, competitive
Smaller organizations; flat hierarchy, less formalized, with fewer written rules and standardized procedures
Management processes Low Individualism
HRM
Management selection Group membership; school or university
Training Focus on company-based skills
Evaluations/promotion Slow, with group; seniority
Remuneration Based on group membership; organizational paternalism
Management styles Appeals to duty and commitment
Motivational assumptions Moral involvement
Decision making/ organisational design
Group; slow
(Source: Cullen and Parboteeah, 2008)
Hofstede’s model and management implications (3)
Individual rewards and punishments based on performance
Calculative; individual cost/benefit
Individual responsibility
High Individualism
Universalistic based on individual traits
General skills for individual achievement
Based on individual performance
Extrinsic rewards (money, promotion) based on market value
Management processes
HRM
Management selection
Training
Evaluations/promotion
Remuneration
Management styles
Motivational assumptions
Decision making/ organisational design
(Source: Cullen and Parboteeah, 2008)
Hofstede’s model and management implications (4)High Masculinity
Jobs gender identified; school performance and ties important
Career oriented
Continues gender-tracking
More salary preferred to fewer hours
Low Masculinity
Independent of gender, school ties less important;
Job-oriented
Job performance, with less gender-based assignment
Less salary difference between levels; more time off
More Theory X; authoritarian More participative
Emphasis on quality of life, time off, vacations; work not central
Emphasis on performance and growth; excelling to be best; work central to life; job recognition important
Intuitive/group; smaller organizations preferred
Decisive/individual; larger organization preferred
Management processes Long-Term Orientation
HRM
Management selection Fit of personal and background characteristics
Training Investment in long-term employment skills
Evaluations/promotion Slow; develop skills and loyalty
Remuneration Security
Management styles Build social obligations
Motivational assumptions Subordinate immediate gratification for long-term individual and company goals
Decision making/ organisational design
Synthesis to reach consensus; design for social relationships
(Source: Cullen and Parboteeah, 2008)
Hofstede’s model and management implications (5)
Short-Term Orientation
Objective skill assessment for immediate use to company
Limited to immediate company needs
Fast; based on skill contributions
Pay, promotions
Use incentives for economic advancement
Immediate rewards necessary
Logical analyses of problems; design for logic of company situation
Contributions and limitations of Hofstede’s model
Main contributions:• identifies cultural dimensions with hard data• makes comparisons across countries• shows culture’s consequences in managerial behaviours
Main criticisms:
• the conceptualization of national culture (e.g. implicit, territorially unique)
• the representativeness of the survey respondents (i.e. IBM employees; the average sample size per country was small)
• a mismatch between some dimensions and their measurements
• three cultures at play: national, organisational and occupational
Group Work 1
Pick any two countries in the world. Discuss and summarize the managerial implications of cultural differences by applying the Hofstede model.
7d cultural model (Trompenaars and Hampden-Turner)
• based on results of a large-scale study (over 15,000 employees from 55 countries)
• like Hofstede, also proposed comparing countries using cultural dimensions
• all cultures have to deal with 3 basic problems: --social interactions --passage of time --relationship to the environment
7d cultural model Relationships with people: • Universalism vs. Particularism (the choce of dealing with other people
based on rules or based on personal relationships)• Individualism vs. Collectivism (the focus on group membership versus
individual characteristics)• Specific vs. Diffuse (the type of involvement people have with each other
ranging from all aspects of life to specific components)• Neutral vs. Affective (the range of feelings outwardly expressed in the
society)• Achievement vs. Ascription (the assignment of status in the society based
on performance vs. assignement based on heritage)
Perspective on Time:• Sequential vs. Synchronic (the orientation of the society to the past, present,
or future or some combination of the three)
Relationship with the Environment:• Internal vs. External Control (nature viewed as something to be controlled
vs. something to be accepted) (Trompenaars and Hampden-Turner, 1998)
GLOBAL National Cultural Framework (1)
• the GLOBAL project involves 160 researchers
• data collected over 7 years from 18,000 middle managers in 62 countries
• based on Hofstede’s model and developed 9 cultural dimensions (only 2 are independent of the Hofstede model)
GLOBAL National Cultural Framework (2)9 cultural dimensions • Assertiveness • Gender egalitarianism• Institutional collectivism• In-group collectivism• Future orientation• Power distance • Uncertainty avoidance
• Performance orientation (the degree to which the society encourages societal members to innovate, to improve their performance, and to strive for excellence)
• Humane orientation (the extent to which individuals are expected to be fair, altruistic, caring, and generous.)
(House, Hanges, Javidan, Dorfman, and Gupta, 2004)
Institutional effects too…
National Culture
Common values, norms of behaviour & customs;
assumptions that shape manager’ perceptions…
Institutions
National labour laws; trade unions; educational & vocational training;
labour market/ professional bodies; employer’s federation;
consulting organisations…
National HRM
Recruitment & selection; training & development; career development; performance management; pay &
benefits; communication…
Apart from culture, different countries have different institutions and legal systems
Which has the greatest influence on an MNC?
The national culture and institutions of the
home country.
Or
The national culture and institutions of the
host country.
Home and host country effects
• Country of origin effects: the greatest influence on the MNC is the national culture and institutions of the country from which it originated
• Host country effects: the greatest influence on the MNC is the national culture and institutions of the country from which it is located
Country of origin effects (1)
Sources of the effect:
• the concentration of assets, sales and employment: on average around half of the operations of the largest 100 MNCs are located in the home base
• The dominance of home country nationals in senior managerial positions
• Main policies dictated by HQ
Country of origin effects (2) Example: Country of origin effects in US MNCs
McDonald’s• The chain has over 31,000 outlets in 119 countries• McDonald’s is known for exporting its HR practices rather than
adapting to local customs --McWork (standardisation, supervision…) --Part-time/ flexible working --Anti-union
• Overall, McDonald’s retains US business culture as much as possible• But evidence of adaptation too (e.g. increasingly responsive to
consumer tastes in different countries)• Country of origin effects, therefore, do not cover all complexities, major
influences come too from host country effects.
Host country effects (1)
Also known as ‘societal effect’ or ‘national business systems approach’.
Sources of the effect:• different countries have different national cultures, institutions,
and legal systems
• subsidiaries have to conform to local social norms and legal regulations
• policies to reduce number of expatriates in favour of locals
Host country effects (2)Example: lean production
• Lean production: so-called as it uses less of everything (manpower, time, raw materials)
• Also known as ‘Toyotism’, or ‘Japanisation’
Characteristics of lean production• Team working with team leaders• Quality circles: workers spot own defects • Workers responsible for own discipline• Worker feels part of process• ‘Just in time’ supply systems• Dealers integrated into process
Host country effects (3)Example: lean production
• Impact of host country culture/ institutions on lean production
Country National culture/institutions
Impact on lean production
Germany --heavily legislated
--apprenticeship system
--adapted to German law
--skills hierarchy permitted
• But lean production was still broadly recognisable in all national contexts (e.g. focus on teamwork and consensus)
• Picture actually very complex… Home and host influences interact to create new hybrid cultures…
UK --hierarchical
--worker/ manager suspicion
--team leader as ‘foreman’
--quality circles ignored
Group Work 2
You have been hired as a consultant to three MNCs: an American high-tech firm opening a new site in China; a British retail bank setting up in India; and a German car manufacturing firm relocating its production to Japan.
You have been asked by all three firms to advise them on the desirability and feasibility of transferring HRM practices to their new locations. How would your advice differ in each situation?
Summary
• The study of management differences across countries has been conducted from cultural and insititutional perspetives
• International management can be affected by three levels of culture (i.e. national, business, organizational and occupational culture)
• Cultural models help us understand cultural differences across countries through using cultural dimensions
• An MNC can be influenced by the national cultures and institutions of its home country and host country