MNCs can have different organizational cultures in offshore subsidiaries than in the home office.Some MNCs maintain these separate cultures, some try to change one culture to better fit the other.
Ex: pg. 160 – Upjohn Company with new European partners, Swedes take off entire month of July for vacation and Italian take off August.Organizational culture clashes often occur when a purchasing company does not fully understand the true operations of the business acquired.
Ex: Europeans viewed culture in US as different from their own.
whether partnering with, merging with, or acquiring a foreign company.
Define what is meant by organizational culture and discuss the interaction of national and MNC cultures. Identify the four most common categories of organizational culture. Review the nature and degree of multiculturalism and diversity in today’s MNCs. Discuss common guidelines and principles used in building multicultural effectiveness at team and organizational levels. Objectives
Organizational culture – the shared values and beliefs that enable members to understand their roles and the norms of the organization. Characteristics: (not an all-inclusive list) Observed behavioral regularities Norms Dominant values MNC philosophy Rules Organizational climate Organizational Culture
1. 2. 3. 4. 5. 6. 7. What Characteristics do you look for in an organization?
National cultural values have a significant impact on organizational performance. Cultural values employees bring to the workplace with them are not easily changed by the organization. “Far from reducing national differences, organizational culture maintains and enhances them.” - National and Organizational Cultures
Some researchers have found that when Germans work for a US MNC, they become even more German, and when Americans work for a German MNC, they become even more American. Why would this knowledge be important to these MNCs? Discussion
Differences in European Management Characteristics It can be difficult to do business with two or more of these groups. Ex: Pg. 163 – French and Spanish negotiators Differences in culture can reduce the ability of units to work well together. An organization really needs to know national and organizational cultures when breaking into foreign markets. Cultural differences should be discussed, and activities carefully coordinated.
Family Culture Eiffel Tower Culture Guided Missile Culture Incubator Culture Four Types of CultureBased on Dimension of Equity and Task
Organizational Cultures According to Trompenaars
Strong emphasis on hierarchy and orientation to the person.
Family types environment that is power-oriented and headed by leader who is regarded as a caring parent.
Organization personnel respect the individuals who are in charge
Foreign to most managers in the in the United States, who believe in
valuing people based on their abilities and achievements, not on their age or position in the hierarchy.
Strong emphasis on hierarchy and orientation to the task Jobs are well defined, employees know what they are supposed to do, and everything is coordinated from the top Person at the top of hierarchy is not reared as all powerful Most common in northwestern Europe (Denmark, Germany, and the Netherlands) Eiffel Tower Culture
Characterized by strong emphasis on equality in the workplace and orientation to the task Teams or project groups are prevalent Formal hierarchy are given low priority and a great focus on individual expertise. Motivation is more intrinsic than just concern for money and benefits. Guided Missile Culture
Strong emphasis on equality and personal orientation Organizations are secondary to the fulfillment of the individuals within them. Creates environments where participants thrive on an intense, emotional commitment to the nature of the work All participants are working toward the same objective Incubator Culture
In which of the four types of organizational cultures (family, Eiffel Tower, guided missile, incubator) would most people in the US feel comfortable? In which would most Japanese feel comfortable? Based on your answer, what conclusions could you draw regarding the importance of understanding organizational culture for international management? What kind of culture did you choose? Discussion
What Type of Culture is this? Google Company Information
Southwest Company Website What Culture is This?
SouthWestCompany Culture Click Southwest Logo to Watch a Video
Success in the international arena often is greatly determined by an MNC’s ability to manage multiculturalism and diversity. Evolution of International Companies – Domestic, International, Multinational, Global Multiculturalism and Diversity
Domestic – culturally distinct population within an organization within the same country. (New York, Miami, San Francisco, etc.) Group – Homogeneous groups – members have similar backgrounds and generally perceive, interpret, and evaluate events in similar ways. Token groups – all members but one have the same background. Bicultural groups – two or more members represent each of two distinct cultures. Multicultural groups – three or more different ethnic backgrounds within the group. Types of Multiculturalism
Most MNCs need not enter foreign markets to face that challenge of dealing with multiculturalism. Do you agree or disagree with this statement? Explain your answer. “Lack of diversity in corporate America.” Discussion
Attitudinal - mistrust of others Perceptual – preconceived stereotypes Inaccurate communications – different word meanings, misinterpreted nonverbal communication, different perceptions of time Potential Problems with Diversity
Enhance creativity Better ideas Better decisions – prevent groupthink (social conformity and pressures on individual members of a group to conform and reach consensus) More effective and productive performance – connect with customers from different cultures Advantages of Diversity
Effectiveness of Diversity Displayed Diagrammatically
What are some potential problems that must be overcome when using multicultural, diverse teams in today’s organizations? What are some recognized advantages? Identify and discuss two of each. Discussion
Questions: What do you think some of the main organizational culture differences between the two companies would be? Why might the cultural diversity in the Spanish firm not be as great as that in the US firm, and what potential problems could this create? What would you recommend be done to effectively merge the two cultures and ensure they cooperate harmoniously? Offer some specific recommendations. Case Study, pg. 183:“A Good-Faith Effort Is Needed”