The Role of Culture

1
The Role of Culture

• Managing Across National and Organizational
  Cultures

Mark McKenna BUS 162 (6), International and
Comparative Management San Jose State University
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
2
Overview

• Applying Hofstedes Cultural Dimensions
• Organizational Cultures
• Multiculturalism

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Applying Hofstedes Cultural Dimensions

• Cross-Cultural Differences and Similarities
• Six Basic Cultural Variations
• Exercise A Jumping Off Place

4
Differences and Similarities

• Challenges for effective cross-cultural
  management
• Parochialism the tendency to view the world
  through ones 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

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Differences 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

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Basic Cultural Variations

• What is the nature of people?
• What is the persons relationship to nature?
• What is the persons relationship to other
  people?
• What is the modality of human activity?
• What is the temporal focus of human activity?
• What is the conception of space?

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A 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

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A 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.?

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Figure 4-5 A Power-Distance and
Individualism-Collectivism
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Figure 4-6 A Power-Distance and
Uncertainty-Avoidance
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Figure 4-7 A Masculinity-Femininity and
Uncertainty-Avoidance
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A Jumping Off Place
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Caveats 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.internat
  ional-business-center.com/mcsweeney.shtml)

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Organizational cultures

• Definition
• Interactions between National and Organizational
  Cultures
• Strategic Predispositions of International
  Organizations
• A Typology of Organizational Cultures

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Definitions

• 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.

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Interactions

• 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

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Europeans Perceptions of Cultural Dimensions of
U.S. Operations/Same MNC
Adapted from Figure 61 Europeans Perception of
the Cultural Dimensions of U.S. Operations (A)
and European Operations (B) of the Same MNC
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Europeans Perceptions of Cultural Dimensions of
European Operations/Same MNC
Adapted from Figure 61 Europeans Perception of
the Cultural Dimensions of U.S. Operations (A)
and European Operations (B) of the Same MNC
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Strategic predispositions

• Ethnocentric
• Polycentric
• Regiocentric
• Geocentric

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Strategic Predispositions
Philosophies of Management

• Ethnocentric predisposition
• A nationalistic philosophy of management whereby
  the values and interests of the parent company
  guide strategic decisions.

Ethnocentric predisposition
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Strategic Predispositions
Philosophies of Management

• Polycentric predisposition
• A philosophy of management whereby strategic
  decisions are tailored to suit the cultures of
  the countries where the MNC operates.

Ethnocentric predisposition
Polycentric predisposition
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Strategic 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
Polycentric predisposition
Regiocentric predisposition
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Strategic Predispositions
Philosophies of Management

• Geocentric predisposition
• A philosophy of management whereby the company
  tries to integrate a global systems approach to
  decision making.

Ethnocentric predisposition
Polycentric predisposition
Regiocentric predisposition
Geocentric predisposition
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Typology of Organizational Cultures
Adapted from Figure 62 Organizational Cultures
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Typology 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

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Typology 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

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MULTICULTURALISM

• The Evolution of International Corporations
• Problems and Advantages of Diversity
• Putting It All Together

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The Evolution of International Corporations
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.
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Phases 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

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Phases 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

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Problems 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

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Putting 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