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Cultural Issues

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Title: Cultural Issues


1
Cultural Issues
2
Factors of Production and Economic Growth
  • Capital (Now, reasonable in HK)
  • Raw materials (Nil in HK)
  • Land (Very little in HK)
  • Labor (Limited in HK)
  • Technology or Technovation
  • (Some technology transfer in the past but very
    little technovation in HK)
  • Technology and its development need to be managed
    effectively for the generation of wealth and
    resources.

3
Induced Innovations and Schumpeterian Innovations
  • Induced innovations are those motivated by such
    signals as shifts in relative prices of inputs
    into a production process or changes in output
    prices e.g. during the second half of the 1970s,
    increases in energy prices provided a strong
    incentive for firms to produce innovations that
    conserved energy or substituted other inputs for
    energy.
  • Schumpeterian innovations are the result of
    entrepreneurial behavior ? the perception that
    it may be possible to exploit some latent demand
    or to attack existing firms with radically new
    product or process.

4
Quality
Value
Time
Cost, Productivity
Innovation
5
Industrial Progress
Innovation
Quality
Productivity
6
Conditions Fostering Innovation
1. Perceived need for some better thing or for
something that does not yet exist. 2. Tolerance
for uncertainty and ambiguity. 3. Willingness to
take risk. 4. Belief in the value of new things
in general. 5. Belief in the ability to obtain
valued benefits from the innovation. 6.
Participation in richly connected social
networks. 7. Willingness to experiment. 8.
Willingness and ability to invest various kinds
of resources in the new thing.
7
Diverse definitions of culture
Topical Culture consists of everything on a list
of topics, or categories, such as social
organization, religion, or economy. Historical
Culture is social heritage, or tradition, that is
passed on to future generations. Behavioral
Culture is shared, learned human behavior, a way
of life.
8
Normative Culture is ideals, values, or rules
for living. Functional Culture is the way humans
solve problems of adapting to the environment or
living together. Mental Culture is a complex of
ideas, or learned habits, that inhibit impulses
and distinguish people from animals. Structural
Culture consists of patterned and interrelated
ideas, symbols, or behaviors. Symbolic Culture
is based on arbitrarily assigned meanings that
are shared by a society.
9
Culture involves at least three components what
people think, what they do, and the material
products they produce. Thus, mental processes,
beliefs, knowledge, and values are parts of
culture. Some anthropologists define culture
entirely as mental rules guiding behavior,
although often wide divergence exists between the
acknowledged rules for correct behavior and what
people actually do. Consequently, some
researchers pay most attention to human behavior
and its material products. Culture also has
several properties it is shared, learned,
symbolic, transmitted cross-generationally,
adaptive, and integrated.
10
The shared aspect of culture means that it is a
social phenomenon idiosyncratic behavior is not
cultural. Culture is learned, not biologically
inherited, and involves arbitrarily assigned,
symbolic meanings. For example, Americans are not
born knowing that the color white means purity,
and indeed this is not a universal cultural
symbol. The human ability to assign arbitrary
meaning to any object, behavior or condition
makes people enormously creative and readily
distinguishes culture from animal behavior.
People can teach animals to respond to cultural
symbols, but animals do not create their own
symbols.
11
Furthermore, animals have the capability of
limited tool manufacture and use, but human tool
use is extensive enough to rank as qualitatively
different and human tools often carry heavy
symbolic meanings. The symbolic element of human
language, especially speech, is again a vast
qualitative expansion over animal communication
systems. Speech is infinitely more productive
and allows people to communicate about things
that are remote in time and space. Note the
above excerpts are taken from John H. Bodley,
From Cultural Anthropology Tribes, States, and
the Global System, 1994.
12
What is culture?
  • Culture is made up of values, beliefs and
    attitudes.
  • Culture depends on historical experiences of the
    particular people.
  • History ?Values Beliefs ?Attitudes
  • V, B and A determine the innovative spirit of the
    people.

13
Exercise
Classify each of the eight conditions fostering
innovation listed earlier as a value, belief or
attitude.
14
Organizational Beliefs Required for Innovation
Belief ? in being the best. ? in the importance
of details of execution. ? in the importance of
people as individuals. ? superior quality and
service.
15
  • Belief
  • ? That most members of the organization
  • should be innovatorsand its corollary, a
  • willingness to support failure.
  • ? In the importance of informality to
  • enhance communication.
  • in, and recognition of, the importance of
  • economic growth and profits.

16
Exercise Chinese Culture
  • What, if any, are the unique values and beliefs
    of Chinese people? (Confucianism, the Middle
    Path, Yin and Yang, …)
  • What role has Chinese history played in
    developing these values and beliefs?
  • What are the attitudes resulting from these
    values and beliefs?
  • How have Chinese values changed in the last 50
    years?
  • How might the above impacting the innovation
    culture of contemporary China?

17
Hong Kong Culture
  • Which, if any, of the Chinese values, beliefs and
    attitudes are evident in todays HK?
  • List two (each) of the contemporary values,
    beliefs and attitudes off HK people.
  • What role, if any, has the British rule played in
    determining HKs contemporary culture?

18
Exercise Tolerance for uncertainty and
ambiguity.
  • Why is tolerance for uncertainty and ambiguity
    important in fostering innovation?
  • Are uncertainty and ambiguity generally tolerated
    in HK? Answer based on your experiences within
    your family, in your school, and at City U.
  • Do you think that you can progress fast in a
    career in HK industry if you exhibit and/or
    promote such a tolerance? Explain.

19
Willingness to take risk.
  • Do HK people like taking risks? Answer with
    examples.
  • If so, are they good at taking short term or long
    term risks?
  • Which kind of risk taking is important in
    fostering innovation?
  • Given your answers to the above questions, what
    are the prospects for innovation in HK?

20
Willingness and ability to invest various kinds
of resources in the new thing.
  • Name three major resources required for fostering
    innovation in a society.
  • Comment on to the extent to which HK has them
    today.
  • Compare HKs GDP spend on RD with
    corresponding figures for five other developed
    countries?
  • Comment on the prospects for HK becoming a world
    center for innovation and technology.

21
Inherited and learned
Specific to Individual
PERSONALITY
Specific to group or category
Learned
CULTURE
Inherited
Universal
HUMAN NATURE
Three Levels of Uniqueness in Human Mental
Programming
22
Symbols
Heroes
Rituals
Values
Practices
The Onion Diagram Manifestation of Culture at
Different Levels of Depth
23
National Cultures
24
The Typical HK or Nanyang (overseas Chinese) firm
has
  • Centralization of the power of decision making,
    usually with a single dominant owner, manager,
    entrepreneur, founder or father figure.
  • A low level of specialization, with fewer and/or
    less detailed specialized departments, and with
    more people responsible for a spread of
    activities across a number of fields.

25
  • Less standardization of activities and thus fewer
    routine procedures.
  • A relative lack of ancillary departments, such as
    research and development, labor relations, public
    relations, market research.
  • Reliance on personal relationships for business
    transactions.
  • Redding and Wong, The Psychology of Chinese
    Organizational Behaviour, pp. 267-295, The
    Psychology of Chinese People, Edited by M.H.
    Bond, Oxford University Press (Hong Kong), 1986.

26
Patronage in Hong Kong
  • HK cotton spinners are patriarchal business
    leaders. They conferred welfare benefits on
    their employees as favors, took a personal
    interest in their subordinates behavior not
    related to work, and disapproved trade union
    activities…Personalized ties with subordinates
    are forged in an attempt to counter their
    centrifugal tendency to set up on their own and
    become rival competitors. For industries such as
    spinning and weaving which require a stable
    workforce to deal with regular business cycles,
    benevolent paternalism is also one means to
    retain workers.
  • Wong Siu-Lin, 1986, Modernization and Chinese
    Culture in Hong Kong, China Quarterly, No. 106,
    p. 313.

27
Key Principles of Confucian Teaching Geert
Hofstede, Cultures and Organizations Software of
the mind, McGraw-Hill, 1997.
28
1. The stability of a society is based on unequal
relationships between people. The wu lan, or five
basic relationships are ruler-subject,
father-son, older brother-younger brother,
husband-wife, and senior friend-junior friend.
These relationships are based on mutual and
complementary obligations. The junior partner
owes the senior respect and obedience. The senior
owes the junior partner protection and
consideration. Q. Stability is clearly important
when economic growth is driven bythe pursuit of
productivity and quality. In contrast, innovation
means instability. Is stability critical in the
context of innovation?
29
2. The family is the prototype of all social
organizations. A person is not primarily an
individual rather, he or she is a member of a
family. Harmony is found in the maintenance of
everybodys face in the sense of dignity,
self-respect, and prestige. Social relations
should be conducted in such a way that
everybodys face is maintained. Paying respect to
someone is called giving face. Q. Discuss the
advantages and disadvantages of the family
prototype in the context of an organization
striving to be nurture innovation as a
competitive weapon.
30
3. Virtuous behavior towards others consists of
not treating others as one would not like to be
treated oneself (The Chinese Golden Rule is
negatively phrased!). There is a basic human
benevolence towards others, but it does not go as
far as the Christian injunction to love ones
enemies. Confucius is supposed to have said that
if one should love ones enemies, what would
remain for ones friends?
31
4. Virtue with regard to ones tasks in life
consists of trying to acquire skills and
education, working hard, not spending more than
necessary, being patient, and persevering.
Conspicuous consumption is taboo, as is losing
ones temper. Moderation is enjoined in all
things. Q. Discuss to what extent these virtues
might have contributed towards the spectacular
economic growth of the five dragons during the
1980s and 1990s. Comment on their utility in the
emerging age of innovation.
32
General conditions to be taken care of in
business with EC gen Schoon
  • Language
  • 15 European languages
  • American English (except UK)
  • Cultural Differences
  • Prussian Perfectionism (Germany)
  • British Empire (UK)
  • la grande nation (France)
  • mediterranes savoire vivre
  • Skandinavian coolness
  • Communication and Management Style
  • National differences are getting smaller
  • But the liveliness is different

33
Power and Influence in Organizations
Handy 1996
Influence
Power Source
Overt
Unseen
Physical
Force
Ecology
Resource
Exchange
Position
Magnetism
Rules Prcdrs
Expert
Persuasion
Personal
34
Power Distance Index (Managing Authority)
PDI indicates the extent to which the less
powerful members of institutions and
organizations within a country/region accept that
power is distributed unequally.
35
  • Large PDI
  • Considerable dependence (or counterdependence) of
    subordinates on bosses.
  • Subordinates either accept or reject bosses
    totally (polarization).
  • Small PDI
  • Preference for consultation, i.e.
    interdependence, between subordinates and bosses.
  • Subordinates quite readily approach and
    contradict bosses.

36
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37
Individualism Index (Managing Harmony)
  • IndividualismTies between individuals are loose.
    Everyone is expected to look after himself or
    herself and his or her immediate family. They
    prefer
  • Personal time Having a job that leaves
    sufficient time for ones personal or family
    life.
  • Freedom Having considerable freedom to adopt
    ones approach to the job.
  • Challenge Have challenging work to do?work from
    which one can achieve a personal sense of
    achievement.

38
  • Collectivism (Small II) People from birth
    onwards are integrated into strong, cohesive
    in-groups, which throughout peoples lifetime
    continue to protect them in exchange for
    unquestioning loyalty. They prefer
  • Training Having training opportunities to
    improve ones skills or learn new skills.
  • Physical conditions Having good physical working
    conditions (good ventilation and lighting,
    adequate work space, etc.)
  • Use of skills Being able to fully use ones
    skills and abilities on the job.

39
Managing Harmony
Hofstede 1982, p.18
40
Western Societies
  • Workplace
  • Run the system impersonally
  • Appointments are made,
  • promotions given, rules applied
  • impersonally
  • Having a brother-in-law as
  • ones assistant is embarassing
  • Nuclear Family
  • Private
  • Personal

41
TENSION
Asian Societies
Impersonal Workplace Management
Personalized Workplace Management
Extended Family
42
Asian Personalistic Ways of Life
  • Friends and relatives matter, friends of
    relatives matter, relatives of friends matter,,,
  • Wisdom of age matters
  • How could people with whom there were personal
    relationships one minute outside work be treated
    impersonally just like any one else half an hour
    later?
  • Must a helping hand to friends, family, ethnic
    group or tribe become nepotism?
  • Is Western-style impersonalism in every aspect of
    management an unavoidable condition of effective
    modern organization? Or have the Japanese or
    Chinese or other societies found an alternative
    way? Hickson 1995

43
Characteristic Chinese Small Business in HK
Hickson 1995
  • Paternalistic and personalistic.
  • Owner, frequently the head of the family, manages
    by direct personal involvement.
  • He brings in family members and others (with
    ability) he can trust. Benevolence is exchanged
    for loyalty.
  • Formalization is low. Written instructions,
    procedures and rules are minimal.
  • Supply-chain links dominated by owners relatives
    and friends. Informal links. Sometimes, exchange
    of directorships that follow personal links
    rather than financial interest.

44
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45
Collectivism in Hong Kong
  • Chinese collectivists give priority to
    considerations of how their behavior might affect
    their standing within the group.
  • Hong Kong Chinese are more likely than Americans
    to pursue conflict if the stakes involved are
    high and if the other person is from an
    out-group.
  • Leung Kwok, 1988, Some determinants of conflict
    avoidance, J. Cross Cultural Psychology, Vol. 19,
    No. 1, pp. 125-136.

46
Individualism and Prosperity
  • Hofstede 1983 plotted per capita GNP in 1970
    versus Individualism Index for a number of
    nations and found a positive correlation, i.e.,
    wealthier nations are more individualistic. But,
  • Is individualism the cause of prosperity?
  • Or, is prosperity the cause of increase in
    individualism?

47
Masculinity Index (Managing Oneself)
  • Masculine Societies (large MI) They prefer
  • Earnings Having an opportunity for high
    earnings.
  • Recognition Getting the recognition one deserves
    when one does a good job.
  • Advancement Having an opportunity for
    advancement to higher level jobs.
  • Challenge Have challenging work to do?work from
    which one can get a personal sense of
    accomplishment.

48
  • Feminine Societies (Small MI) They prefer
  • Manager Having a good working relationship with
    ones direct supervisor.
  • Cooperation Working with people who cooperate
    well with one another.
  • Living area Living in an area desirable to
    oneself or ones family.
  • Employment security Having the security that one
    is able to work for ones company as long as one
    wants to.

49
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50
Sectorial Factors in HK
  • Public Sector Managers value advancement
    opportunities, and security for employment
    (Feminine?).
  • Private Sector Managers value opportunities for
    advancements and high earnings (Masculine?).
  • Chau, Irene Hau-siu, 1988, Work related values
    of middle managers in the private and public
    sectors, Proc. 1988 Academy of International
    Business South East Asia Regional Conf., Bangkok,
    June 23-5, A14-25.

51
Uncertainty Avoidance Index (Managing Uncertainty)
  • UAI indicates the extent to which the members of
    a culture feel threatened by uncertain or unknown
    situations.
  • High UAI ? increased anxiety, more
    expressiveness. Low UAI ? more internalization,
    higher incidence of coronary diseases.
  • Paradoxically, people with high UA tend to reduce
    ambiguity. They are often prepared to take risks
    to reduce ambiguity.

52
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53
Individu- alistic
Collecti- vistic
Low PDI
High PDI
Low UAI
High UAI
Feminine
Masculine
Anglo-Saxon (USA, UK, Australia)
Scandinavian (Sweden, Denmark, Norway
Germany
Handy 1996 Hofstede 1980 Mant 1983
Japan
54
The 5th Dimension Long versus Short Time
Orientation
  • LTO a capacity/willingness to
  • - adapt tradition to new situations,
  • - amass through thrifty use of scarce resources
  • - subordinate ones own interests for a
    purpose
  • - be virtuous.
  • STO expectation of quick results, and a concern
    with face and truth.

55
LTO Ranking
  • High LTO to low LTO
  • PRC, HK, Taiwan, Japan, S. Korea, Brazil, India,
    Thailand, Singapore, Netherlands, Bangladesh,
    Sweden, Poland, Germany FR, Australia, New
    Zealand, USA, UK, Zimbabwe, Canada, Philippines,
    Nigeria, Pakistan
  • Hofstede 1991, 1997

56
But, if HK is high on LTO,
  • Why
  • is HK weak in technological innovation?
  • does HK spend a miniscule of proportion of its
    wealth on R D which is essential for sustained
    technological innovation?
  • Why is there the perception that HK people are
    only interested in quick money?

57
American Style Management Peters and Waterman
1982
  • A bias for action (high MI)
  • Being close to the customer
  • Autonomy and Entrepreneurship (high MI and II)
  • Productivity through people (high expectations of
    productive performance (i.e., high MI and II)
  • Hands-on, value-driven
  • Stick to the knitting
  • Simple form, lean staff
  • Simultaneous loose-tight properties
    (decentralization of authority goes with
    toleration of uncertainty)

58
Organizational Cultures
59
Cultural Relativism
  • It is futile to look for absolutes (good/bad,
    superior/inferior, etc.) while evaluating
    cultures.
  • Everything is relative and must be interpreted in
    a context. What is a strength in one context may
    turn out to be a weakness in another.
  • What is good in the eras of productivity and
    quality may turn out to be bad in an era of
    innovation.
  • What is good culture in an environment of
    operations may turn out to be bad in a project
    environment.

60
Contingency Theory
  • The appropriate culture is contingent upon the
    following influencing factors
  • History and ownership
  • Size
  • Technology
  • Goals and objectives
  • The environment
  • The people

61
Four Reference Models for Organizations
0
Village Market
Family
SGP
HK
UK
India
USA
Uncertainty Avoidance Index
Ger
Aus
Pak
Gua
Jap
Pyramid of people
Well-oiled Machine
100
0
100
Power Distance Index
62
The Power Culture (The Web)
Handy 1996
63
  • Patron god Zeus, the all-powerful head of gods
    who ruled by whim and impulse, by thunderbolt and
    shower of gold from Mount Olympus.
  • Central power source, with rays of power
    spreading from the that central figure.
  • Typical of small entrepreneurial organizations
    and family owned businesses. GEC of UK. Some
    trade unions. Some property, trading and finance
    companies.
  • Few rules. Little bureaucracy. Few committees.
  • Control exercised through careful selection of
    individuals and occasional summonses from the
    center.

64
  • Proud and strong. Ability to move quickly.
  • Resource power is the major power base.
  • Judge by results. Tolerant of means.
  • Can be as bad as effective depending upon the
    people in power. When the spider dies, the web
    dies. Succession issue is important.
  • Size is a problem. Web can break if too many
    activities are undertaken.

65
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66
  • Patron god Apollo the god of reason.
  • Pillars functions or specialties (finance,
    purchasing, production, etc.).
  • Control through procedures for rules (job
    descriptions, authority definitions),
    communications (require no. of copies of
    memoranda), and settlement of disputes.
  • Coordination by narrow band of seniors.
  • Position power is the major power base. Personal
    power is frowned upon.
  • Performance above role requirement not required.

67
  • Will succeed in stable environment because of
    monopoly (the Civil Service), long product life
    cycles (automobile, oil, life insurance, and
    retail banking), and sellers market.
  • The Greek temple shakes when the ground shakes,
    when there is change. Then collapse or
    replacement of top management takes over.
  • When stable, provides security and predictability
    to individuals. When change occurs, there is much
    frustration.

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69
  • Patron gods Athena, the warrior goddess and
    Odysseus, the commando leader.
  • Project-oriented. Team culture. Right people
    selected and given freedom. Matrix organization.
    Influence and expertise are the power bases.
  • Some strands of the net are thicker than others.
    Power concentrates at interstices.
  • Extremely adaptable through reconfiguration.
  • Personal control over work. Judgment by results.
  • Works well when flexibility, sensitivity, and
    creativity are required.
  • Cant build economies of scale or depths of
    expertise. Cant build a factory.

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71
  • Patron god Dionysus, the god of the
    self-oriented individual.
  • The individual is the central point. Organization
    exists to serve his aspirations.
  • Can exist when there is no super-ordinate
    objective Barristers chambers, architects
    partnerships, hippy communes, social groups,
    families, some small consultancy firms.
  • Many individuals aspire for it. Very few
    organizations practice it.
  • Only the original creators achieve any success.
    Soon the organization imposes its own objectives
    and it might change to power or role culture.

72
Typical progression of an organization
Different cultures in different organizat
ional units
73
Handy 1996
Policy
Crisis
Innova- tion
  • Dominant activity
  • in a unit
  • Steady state
  • Innovation
  • Crisis (breakdown)
  • Policy.

Steady State
74
Mintzbergs Seven Types of Organization
  • The entrepreneurial (Power)
  • The machine (Role)
  • The professional (Task)
  • The Innovative (Person)
  • The missionary (?)
  • The diversified
  • The political (a law unto itself). Handy 1996

75
The Seven S Diagram Pascale and
Athos, The Art of Japanese Management
Strategy
Cold Triangle
Systems
Structure
Super-ordinate goals
Warm Square
Staff
Skills
Style
76
References
  • Chen 1995 Min Chen, Asian Management Systems,
    International Thomson Business Press, London.
  • Handy 1996 Charles Handy, Understanding
    Organizations, 4th edition, Penguin Books,
    London.
  • Hofstede 1980 Hofstede, G., Cultures
    Consequences, Saga.
  • Hofstede 1997 Hofstede, G., Cultures and
    Organizations?Software of the Mind, McGraw Hill,
    NY.
  • Mant 1983 Mant, Leaders We Deserve.
  • Mead 1994 Richard Mead, International
    Management Cross Cultural Dimensions, Blackwell
    Business.
  • Mintzberg 1989 Mintzberg, H., Mintzberg on
    Management, The Free Press.
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