3. Acknowledging Culture
Cultural diversity can exist on a national and
cross-national level
Often, managers assume that culture does not
play an important role in shaping practices =>
Universalistic approach: ‘if it works here, it will
work there’
Such approach contributed to high failure rates in
expatriate missions and international mergers
In order to manage cross-cultural differences,
managers need to acknowledge and understand
them
3 Cross-Cultural Management
4. Diversity-Related Problems
Increased ambiguity
Increased complexity and confusion
Difficulty to converge meanings and
Miscommunication
Lower cohesiveness
Harder to reach agreement
Harder to make decisions and agree on
specific actions
4 Cross-Cultural Management
5. Diversity-Related Advantages
Expanding meanings and
Broader cognitive frame & resources
Multiple perspectives
Multiple interpretations
Richer alternatives & more ideas
Increased creativity and problem solving skills
Increased flexibility
5 Cross-Cultural Management
6. Diversity and Types of
Organizations
• Organizational culture affects the acceptance and
impact of diversity in organizations
• Parochial: Our is the only way
• Ethnocentric: Our way is best
• Pluralistic (synergetic): The best is combining
our ways and their ways
In large companies, different divisions may have
different sub-cultures
The more complex, unpredictable and global is the
business environment of a company, the more
competitive advantages cultural diversity has.
6 Cross-Cultural Management
7. Nature of Organizational Culture
• Organizational culture
– Pattern of basic assumptions that are
developed by a group as it learns to cope
with problems of external adaptation and
internal integration and that are taught to
new members as the correct way to
perceive, think, and feel in relation to these
problems
– An MNC’s organizational culture in one
country’s facility may differ sharply from
those in other countries
7 Cross-Cultural Management
8. Nature of Organizational Culture
• Interaction Between National and Organizational
Cultures
– National cultural values of employees have
a significant impact on organizational
performance
– Cultural values that employees bring to the
workplace are not easily changed by the
organization
– Substantial differences may be observed
among subsidiaries that cause coordination
problems
8 Cross-Cultural Management
9. Organizational Cultures in MNCs
• Integration of organizational cultures is crucial
following mergers and acquisitions
– Integration process consists of:
• Establishing a common purpose, goal, and focus
• Identifying important organizational structures
and roles
• Determining who has authority over resources
• Identifying the expectations of all involved parties
and facilitating communication between the
parties
9 Cross-Cultural Management
10. Organizational Cultures in MNCs
(cont.)
• Family culture
– Strong emphasis on hierarchy and person
orientation
• Power-oriented with paternalistic leader
• Leader looked to for guidance
• Can catalyze and multiply employees’ energy
• Reliance on intuition rather than rational
knowledge
10 Cross-Cultural Management
11. Organizational Cultures in MNCs
(cont.)
• Eiffel tower culture
– Strong emphasis on hierarchy and task
orientation
• Employees know what to do
• Coordination from the top
• Methodic approach to motivating and
rewarding people and resolving conflict
11 Cross-Cultural Management
12. Organizational Cultures in MNCs
(cont.)
• Guided missile culture
– Strong emphasis on equality in the
workplace and orientation to the task
• Work typically undertaken by teams or project
groups
• Low priority attached to hierarchical concerns
• Employs a “cybernetic” structure
• Culture may change quickly
12 Cross-Cultural Management
13. Organizational Cultures in MNCs
(cont.)
• Incubator culture
– Strong emphasis on equality & personal
orientation
• Organizations are secondary to the fulfillment
of individuals
• Organization is an incubator for self-
expression and self-fulfillment
• Participants have intense emotional
commitment to their work
13 Cross-Cultural Management
15. Processes & Implications
Attraction-Selection-Attrition framework
• Where do you advertise for jobs?
• Who interviews and selects candidates?
• What type of people is the company
(implicitly and explicitly) looking for?
• Who gets promoted?
• Mentoring
• Networking
15 Cross-Cultural Management
16. Examples
• Knowledge workers
• Medical doctors & nurses
• University academics
16 Cross-Cultural Management
20. CULTURE REVIEWED
• Organizations also have a learned, shared,
interrelated set of symbols and patterns of basic
assumptions
• The culture help the organizations cope with
problems it faces
– external adaptation
– internal integration
20 Cross-Cultural Management
21. CULTURE REVIEWED
CULTURE HELPS ORGANIZATIONS INTEGRATE
INTERNALLY (PPS) AND ADAPT/SHAPE EXTERNALITIES
(6 GLOBAL ENVIRONMENTS) TO SURVIVE.
• Culture permeates the organization
– Through knowledge acquisition
– Organizational symbols
– Organizational stories
– Organizational rites
21 Cross-Cultural Management
22. ORGANIZATIONAL KNOWLEDGE
• Explicit—formalized and widely distributed
• Implicit—norms or “how we do things around
here”
22 Cross-Cultural Management
23. EXAMINE ORGANIZATIONAL
SYMBOLS
• What language is in use and where?
• Who is pictured on annual reports, web pages,
or brochures?
• What colors represent the company; where are
they used?
• What logos are in use?
23 Cross-Cultural Management
24. ORGANIZATIONAL STORIES
TELL US
• what the employee is supposed to do when in
doubt
• what to do when a high-status person breaks the
rules
• how the little person advances within the
organization
24 Cross-Cultural Management
25. ORGANIZATIONAL RITES
REINFORM NORMS
• Rites of degradation dissolve a person’s
organizational identity
• Rites of enhancement recognize
accomplishments or enhance power
• Rites of renewal lubricate social relations
• Rites of conflict reduction reduces conflict by
partitioning it
• Rites of integration revive common feeling
25 Cross-Cultural Management
26. NATIONS TRADITIONALLY
SHAPE ORGANIZATIONS
HOW DOES CULTURE
AFFECT FIRMS?
Traditionally: national culture shapes business
BUSINESS ACTIVITIES
Business culture
INDIVIDUALS
FAMILIES
NATIONAL CULTURE
26 Cross-Cultural Management
27. BUT INFLUENCES COME FROM
MULTIPLE SOURCES
• Professional training/groups
• Family
• Subgroups, e.g., R&D or accounting
27 Cross-Cultural Management
28. INCREASINGLY WE ALSO SEE
• business influences come not only from
domestic influences but also from international
and global business activities, e.g.,
– subsidiaries
– joint ventures and other strategic alliances
28 Cross-Cultural Management
29. OFTEN CREATING CULTURE
CLASH
• between parent and subsidiary
• among managers
29 Cross-Cultural Management
30. THUS IN A GLOBAL WORLD, BUSINESSES
BECOME CULTURAL CONDUITS
See page 207 of Introduction to Globalization
and Business by Barbara Parker
30 Cross-Cultural Management
31. BUSINESS INFLUENCES
CULTURE THROUGH
– Global entertainment and electronic media
– Global travel
– Global language
– Global demographic groups
• Global elite
• Global teens
– Business behaviors
31 Cross-Cultural Management
32. GLOBAL INFLUENCES OF
BUSINESS ON CULTURE
• Make global businesses more central to
– Cultural change
– Cultural concerns
– And cause them to interact more with social
actors such as NGOs and governments
32 Cross-Cultural Management
34. Diversity Defined
• Human diversity
– Visible
– Less or invisible
• Diverse structural configurations
• Diverse processes
34 Cross-Cultural Management
35. Global Organizations Emphasize
Inclusive Networks When They
• a) reexamine their norms or traditional ways of
doing things
• b) seek and value similarities as well as
differences as sources of competitive
advantage, and
• c) train people for skills that enhance a sense of
inclusion
35 Cross-Cultural Management
36. Diversity Initiatives
Communications Education and Training Employee Involvement
CEO speeches Diversity briefings for Task forces on diversity
managers
Written diversity policy; Awareness training for Interest groups for members of
diversity brochures everyone diverse populations
Second language publications Diversity skills training Company time provided for
diversity planning
Reports to the public or to Multicultural team training Networking groups
shareholders
Press releases Sexual harassment training
Career Development Performance and
Accountability
Mentoring Define behaviors that enhance
inclusion
Succession planning for Monitor and report on diversity
diversity progress
Individual development plans Link rewards to achieving
diversity objectives
Assign people to diverse jobs Develop diversity measures
over a career that are both qualitative and
quantitative
Networking directories
36 Cross-Cultural Management
37. Approaches to Managing Human
Diversity
• Discrimination and fairness
• Access and legitimacy
• Learning
37 Cross-Cultural Management
38. Strategic Responses for Managing
Diversity and their Implementation
Episodic Freestanding Systemic
Low
1 2 3
Deny an assignment to an employee Choose to risk fines or other costs, Choose geographic locations for the
because a client might object to the rather than engage in equal business which avoid diversity / where
employee’s nationality, race, employment opportunity practices the local workforce does not contain
gender, age, etc. protected classes
4 5 6
In response to a governmental Regular sexual harassment training Performance appraisal standards for
employment audit, provide a which focuses on how to avoid legal managers include specific targets /
workshop for protected groups on liability quotas for hiring of protected groups
“how to succeed by adapting to fit
Pressures for Diversity
into the organization”
7 8 9
To increase diversity awareness for Sponsor an annual event that To ensure equal pay, program the HR
managers, bring in a speaker to tell celebrates a protected group, e.g., computerized management system to
them how to value the diversity of Special Olympics annually review and adjust pay
i mo
ev t ad
their employees differentials between non-protected
and protected groups
10 11 12
Pilot an employee network Regularly include vendors, suppliers, Different business units continually
conference that engages employees and customers in the organization’s share information about their diversity
r o ses nopser c ge art S
e v s nef e D
and their managers in reciprocal diversity training offerings to increase successes and failures, then adapt and
learning activities their involvement in and contribution to integrate them into their businesses
diversity efforts
i t
i
High
e v t c ae v t c aor P
Marginal Strategic
Executive priorities for managing diversity
Ri
38 Cross-Cultural Management
f
i
39. Diverse Structures
• Hierarchical
– Export office to functional to divisional to
hybrids
• Internal horizontal
– Networks, shamrocks, matrix, virtual
• Interorganizational
– Joint ventures
– Strategic alliances
39 Cross-Cultural Management
40. Diverse Processes
• IT—integration depends on infrastructures that
vary
• HR—selection, development, and compensation
in different nations and regions
• Labor practices and conditions
• Social responsibility and ethics initiatives
40 Cross-Cultural Management
Editor's Notes
This lecture applies cultural concepts to organizations.
The introductory case highlights MTV, a Viacom business that has a very distinctive culture. Other firms with distinctive cultures include Disney, Microsoft, Nike, Wal-Mart, Siemens, Toyota, FedEx Your studies of global firms will demonstrate that each has a corporate culture, but these cultures differ from one another; some are strong, some weak . A good example of organizational culture is Walt Disney Corp. (if available show potion of Mickey Mouse Monopoly video—see document for details). As early as 1958, Roy Disney as president said “integration is the key word around here.” Disney has a deeply rooted corporate culture that self-reinforces. For example, Mickey is embedded in everything: buildings, furniture, even the toilet paper at Disney resorts are embossed with a Mickey logo. Everyone is a “cast” member—meaning they are always performing. Bosses are “leads,” and executives dress up as characters from time to time to wander the theme parks. The underground transit systems help to emphasize that everything happens as if by “magic.”
Explicit knowledge about culture is usually formalized and widely distributed in printed statements of values, beliefs, or mission.
Even a glance at who is pictured on an annual report can tell us much about the organization and what it represents. Organizations sometimes develop their own unique language to convey a particular cultural value. For example, Nike's "Just do it" campaign reflected their preference for action. Organizations also convey messages in verbal and nonverbal forms. For example, logo colors and pictures convey a particular image of the organization.
An example: the 2004 CEO of PepsiCo was featured in an article that reported that on a family outing, the CEO had left a restaurant because they only served Coca Cola. What’s the message this story tells about how people at Pepsi are supposed to view the product?
Organizational rites of passage such as a promotion party honor the transition from one role to another. Rites of renewal such as year-end parties help to lubricate social relations, and rites of integration such as team-building exercises or executive retreats may revive or develop a shared sense of organizational purpose.
In practices considered “unnatural” to the subsidiary.
What’s the role of business in cultural globalization? Businesses have been cultural conduits and in the past adopted and transmitted norms of their national cultures. As the business world becomes more interdependent worldwide, more businesses go global to become shapers of a hybridized global culture.
Global language of business has been English. According to UNESCO, reported in The Economist Special report Babel runs backwards. Jan uary 1, 2005, pp. 62–4. Mandarin Chinese is spoken by about a billion people (only about 100 million speak English), half a billion speak English, a little less than 400 million Speanish, 400 million Hindi, 2.3 million Arabic, 2.2 Bengali, 180 m illion, Russian, followed by Portug u ese, Japanes e , German, and French.
Ideally diversity in the workforce makes global organizations more alert and responsive to their world.
Human diversity is important to organizations when it is important to the individuals who represent it . Visible forms of diversity: gender, race, nationality, age, and physical abilities . Less visible but no less important: religion, marital status, sexual orientation, values, or economic class . Often forgotten is that organizations manage different structural configurations at the same time. In particular, mergers and acquisitions introduce new structural needs; joint ventures differ from wholly owned subsidiaries. Structural diversity results from activities that involve decision-sharing such as strategic alliances and cross-sectoral partnerships. Depending on the types of businesses held in the corporate portfolio, companies may need to structure for diversity in products/services or nations served. Diverse processes—often due to acquisitions and mergers, different HR systems, information systems, etc. Levi Strauss uses the same human resource management principles everywhere. At the same time, due to national differences, Levi does not compensate everyone the same worldwide. The result is diverse compensation systems dependent on national economic practices. In other cases, technological factors may constrain integration of worldwide processes. For example, a weak telecommunications infrastructure in many African nations limits Internet use as a company-wide communication medium. All these forms of diversity challenge seamless integration .
D iscrimination and f airness: t his approach assumes that prejudice has kept members of certain groups out of organizations and can be remedied by focusing on equal opportunity, fair treatment, and compliance with legal demands, e.g., EEO in the U . S. Remedies consistent with this paradigm favor assimilation such that newcomers become more like existing employees. A cces and l egitimacy: t he access and legitimacy paradigm emerged from the competitive business climate of the 1980s and 1990s, relying more on acceptance and valuing of difference than the discrimination and fairness paradigm. This paradigm was motivated by awareness that diversity outside the organization required greater diversity within. Among the limitations of this paradigm is that it accepts diversity without really understanding how diversity can or does change the way work is accomplished. Although boundaries to acceptance can be transcended with this paradigm, boundaries to understanding remain. Learning is a third and emerging paradigm. This perspective not only values diversity, it also argues that differences in perspectives can help organizations learn. Like the fairness paradigm it promotes equal opportunity and like the access paradigm it acknowledges cultural differences, but it transcends both to make learning the glue through which an organization integrates because of its differences, not in spite of them. These perspectives do not stand alone but are instead integrated with other organizational initiatives; people, processes, structures to look like the following slide.
These are major processes that have been difficult to integrat e on a global level; just about every global firm deals with them .
