Role of culture
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This document discusses managing across national and organizational cultures. It begins by outlining Hofstede's cultural dimensions model and describing differences in power distance, individualism, uncertainty avoidance, and masculinity between the US, Spain, Italy, and France. It then discusses how national cultures can influence organizational cultures and presents strategies for multinational companies. Overall, the document examines how to effectively manage cultural diversity across borders.
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Role of culture
- 1. The Role of CultureThe Role of Culture Managing 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 McKenna BUS 162 (6), International and Comparative Management San Jose State University www.StudsPlanet.com
- 2. OVERVIEWOVERVIEW 1. Applying Hofstede’s Cultural Dimensions 2. Organizational Cultures 3. Multiculturalism www.StudsPlanet.com
- 3. APPLYING HOFSTEDE’SAPPLYING HOFSTEDE’S CULTURALCULTURAL DIMENSIONSDIMENSIONS 1. Cross-Cultural Differences and Similarities 2. Six Basic CulturalVariations 3. Exercise:A Jumping Off Place www.StudsPlanet.com
- 4. Differences and SimilaritiesDifferences and Similarities Challenges 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 www.StudsPlanet.com
- 5. Differences and SimilaritiesDifferences and Similarities Differences across cultures ◦ In the criteria used in evaluating personnel Netherlands France Germany Britain Reality Analysis Helicopter Leadership Imagination Imagination Analysis Leadership Helicopter Reality Leadership Analysis Reality Imagination Helicopter Helicopter Imagination Reality Analysis Leadership ◦ 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 www.StudsPlanet.com
- 6. Basic CulturalVariationsBasic CulturalVariations 1) 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? www.StudsPlanet.com
- 7. A Jumping Off PlaceA Jumping Off Place A 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 www.StudsPlanet.com
- 8. A Jumping Off PlaceA Jumping Off Place If 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.? www.StudsPlanet.com
- 9. Figure 4-5:A Power-Distance andFigure 4-5:A Power-Distance and Individualism-CollectivismIndividualism-Collectivism www.StudsPlanet.com
- 10. Figure 4-6:A Power-Distance andFigure 4-6:A Power-Distance and Uncertainty-AvoidanceUncertainty-Avoidance www.StudsPlanet.com
- 11. Figure 4-7:A Masculinity-Femininity andFigure 4-7:A Masculinity-Femininity and Uncertainty-AvoidanceUncertainty-Avoidance www.StudsPlanet.com
- 12. A Jumping Off PlaceA Jumping Off Place Power Distance Indivi- dualism Uncertainty Avoidance Masculinity USA Low (40) High (91) Low (46) Mid (62) Spain Mid (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) www.StudsPlanet.com
- 13. Caveats and an ObservationCaveats and an Observation Caveats… ◦ 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) www.StudsPlanet.com
- 14. ORGANIZATIONALORGANIZATIONAL CULTURESCULTURES 1. Definition 2. Interactions between National and Organizational Cultures 3. Strategic Predispositions of International Organizations 4. A Typology of Organizational Cultures www.StudsPlanet.com
- 15. DefinitionsDefinitions Hodgetts, 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.” www.StudsPlanet.com
- 16. InteractionsInteractions The 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 www.StudsPlanet.com
- 17. European’s Perceptions of Cultural DimensionsEuropean’s Perceptions of Cultural Dimensions of U.S. Operations/Same MNCof U.S. Operations/Same MNC 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 www.StudsPlanet.com
- 18. European’s Perceptions of Cultural Dimensions ofEuropean’s Perceptions of Cultural Dimensions of European Operations/Same MNCEuropean Operations/Same MNC 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 www.StudsPlanet.com
- 19. STRATEGICSTRATEGIC PREDISPOSITIONSPREDISPOSITIONS 1. Ethnocentric 2. Polycentric 3. Regiocentric 4. Geocentric www.StudsPlanet.com
- 20. 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 Ethnocentric predisposition www.StudsPlanet.com
- 21. 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. Philosophies of Management Ethnocentric predisposition Ethnocentric predisposition Polycentric predisposition Polycentric predisposition www.StudsPlanet.com
- 22. 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. Philosophies of Management Ethnocentric predisposition Ethnocentric predisposition Polycentric predisposition Polycentric predisposition Regiocentric predisposition Regiocentric predisposition www.StudsPlanet.com
- 23. Strategic PredispositionsStrategic Predispositions Geocentric predisposition ◦ A philosophy of management whereby the company tries to integrate a global systems approach to decision making. Philosophies of Management Ethnocentric predisposition Ethnocentric predisposition Polycentric predisposition Polycentric predisposition Regiocentric predisposition Regiocentric predisposition Geocentric predisposition Geocentric predisposition www.StudsPlanet.com
- 24. Typology of Organizational CulturesTypology of 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 www.StudsPlanet.com
- 25. Typology of Organizational CulturesTypology of Organizational Cultures 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 leader Eiffel tower culture ◦ Jobs are well defined ◦ Everything is coordinated from the top ◦ Relationships are specific and job-related ◦ Status remains with the job www.StudsPlanet.com
- 26. Typology of Organizational CulturesTypology of Organizational Cultures 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) equal Incubator culture ◦ Organizations as incubators for self-expression and self-fulfillment ◦ Little formal structure ◦ Focus is on development of an innovative product or service www.StudsPlanet.com
- 27. MULTICULTURALISMMULTICULTURALISM 1. The Evolution of International Corporations 2. Problems and Advantages of Diversity 3. Putting It All Together www.StudsPlanet.com
- 28. The Evolution of InternationalThe Evolution of International CorporationsCorporations 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. www.StudsPlanet.com
- 29. Phases of MulticulturalismPhases of Multiculturalism Domestic 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 diversity International firms ◦ Multidomestic market-oriented strategy ◦ Polycentric or regiocentric perspective – “many good ways” ◦ Multicultural challenge is to manage cross-cultural relationships with clients and employees www.StudsPlanet.com
- 30. Phases of MulticulturalismPhases of Multiculturalism Multinational 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 www.StudsPlanet.com
- 31. Problems and AdvantagesProblems and Advantages Problems 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 www.StudsPlanet.com
- 32. 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