Understanding Cross-cultural Management

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Understanding Cross-cultural Management
CHAPTER 10 CULTURAL CHANGE IN ORGANIZATIONS

• Concept 10.1 Organizational change as a
  cultural process
• Concept 10.2 Organizational change in a global
• environment

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Organizational change as a cultural process

• Success of an organization has to do with
• External factors
• responding to rapid technological change, changes
  in industries and markets, new deregulation
  policies, increased competition, the ongoing
  development of the global economy
• Internal factors
• successful change has to do with maintaining both
  continuity and change, retaining the cultural
  foundation on which the company rests while
  changing its strategies and practices as response
  to environment

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The process of change

• Two differing concepts of change, shift versus
  transformation
• In doing cultures people and groups are mostly
  defined in terms of what they do, what they
  achieve
• organizational change is perceived more in linear
  fashion, a question of putting the past state of
  affairs behind and pushing on with the new
• In being cultures people and groups are defined
  more in terms of affiliation, the relationships
  they have with others in the organization
• the past state of affairs gradually transforms to
  become a new state of affairs

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The process of change (Continued)

• According to Laurent, both the instrumental and
  social nature of the organization must be
  considered
• Managing change involves ensuring the on-going
  running of the organization, re-assigning tasks,
  maintaining overall stability, but this is not
  enough
• Inspirational guidance also needed a leader who
  engages peoples minds through vision
• Minds cannot be managed, but they can be
  transformed through inspiring leaders who spread
  new visions which advocate new meanings and
  lines of thinking

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The process of change (Continued)

• According to Deal and Kennedy (2000), many
  company managers may go about dealing with
  tangible factors involved in change, do not pay
  attention to the cultural issues involved
• To become, for example, more marketing-oriented
  involves subjecting the company to a fundamental
  cultural change which involves everyone in the
  organization
• The change is not just changing routines but
  also identifying with role-models who embody a
  new purpose or goal
• Such fundamental change is often a gradual and
  sometimes painful transformation

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The mechanisms of change (Schein)

• Primary mechanisms for changing culture
• What a leader considers important and pays
  attention to, what must be measured and
  controlled
• The way a leader react to difficult situations
  ands crises shows others how to react in similar
  situations
• The priorities set by a leader when allocating
  resources
• The examples set by a leader these deliberately
  teach and reinforce the desired values and
  behaviours
• The criteria which a leader uses to allocate
  rewards and status as well as to reinforce
  desired behaviours
• The criteria used for recruitment, promotion and
  dismissal

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The mechanisms of change (Schein) (Continued)

• Secondary mechanisms for shaping the culture
  (only effective if consistent with primary
  mechanisms)
• The design and structure of the organization
• The systems and procedures used
• The rites and rituals used
• The design and layout of the organizations
  physical space
• Stories of important events and people
• Formal statements of the organizations
  philosophy

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The mechanisms of change (Schein) (Continued)

• For Schein, culture plays an important role in
  determining
• how environmental developments are perceived by
  members of organizations
• how members of the organization react to the
  strategies designed to respond to those
  environmental developments
• Schein describes
• the major culture issues predominating at each
  phase of a companys growth
• the different change mechanisms which could be
  operating during each phase of growth

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The mechanisms of change (Schein) (Continued)
Table 10.1 Growth States, Functions of Culture
and Mechanisms of Change Source Schein (1989)
p.66, Figure 4-3, adapted
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The mechanisms of change (Schein) (Continued)
Table 10.2 Mechanisms of cultural change Source
Schein (1989) p.66, Figure 4-3, adapted
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Can organizational culture really be changed?

• Deal and Kennedy (2000) argue that a culture
  which has developed along with the organization
  will be difficult to change.
• If the external factors have a strong influence
  on the organizational culture, then it is
  unlikely to change unless the external
  environment changes in line with desired changes.
  
• If organizational culture depends on internal
  factors, then culture can be directed and changed
  
• focus on the leader as instigator of changes, OR
• focus more on how to initiate change at the three
  levels off corporate culture as defined by Schein

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Weak cultures v Strong cultures

• Is cultural change easier to implement in an
  organization with a weak culture rather than a
  strong culture?
• Laurent (1989) considers that both are in a way
  doomed to extinction
• The organization with a weak culture may
  eventually crash since it is poorly coordinated,
  lacks direction and consistency
• The organization with a strong culture may be
  throttled by rigid norms and behaviour and the
  resulting lack of innovation.

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Knowing your company culture

• Laurent advocates a more conceptual
  differentiation which
• takes account of the extent to which an
  organization knows itself
• the environment in which it operates
• The higher the degree of awareness, both
  internally and externally, the better an
  organization can interpret its environment and
  deal with it

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Cultural change in organizations

• Concept 10.2

Organizational change in a global environment
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Tension between organizational national cultures

• Do organizational values push aside or dilute the
  national culture of an organizations
  environment?
• Laurents conclusions drawn from his research
• cultural differences among managers working
  within a multinational company were significantly
  greater than those cultural differences among
  managers working for companies in their own
  (native) country
• nationally bounded collective perceptions of
  organizations did not appear to be diminished in
  any way through international business
• on the contrary these perceptions appear to be
  reinforced through the international exposure

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Tension between organizational national
cultures (Continued)

• The different national companies of
  multinationals probably prefer different ways of
  bringing about the changes which HQ wishes to
  implement
• The transformation of an organization from A to B
  may involve following a different path in one
  part of the multinational than in another, even
  if the end-result (B) is the same
• The outset of the transformation to B will depend
  on how the national organization interprets its
  own present situation (A)

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Does an international corporate culture exist?

• It is argued that more and more international
  companies, including their national constituents,
  share a management culture which has no roots in
  any particular national culture
• international managers increasingly homogeneous
• business practices increasingly convergent
• A true multinational, however, does not
  subordinate national cultures
• regards them as a source of learning
• increases synergy within the company

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Mapping corporate culture change
Figure 10.1 The Competing Values
Framework Source Cameron and Quinn (1999), p.
32, Figure 3.1
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The CV framework
Table 10.3 The characteristics of the CV
framework quadrants Source based on Cameron
Quinn (1999)
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Using the CV framework

• The framework serves as a basis for
• diagnosing the predominant culture of an
  organization
• assessing whether it is responding appropriately
  to the challenges and changes in the environment
• helping to diagnose and manage the
  interrelationships, congruencies and
  contradictions in the organization
• Altogether, the framework helps leaders to
  improve in a comprehensive way the organizations
  performance and value creation.

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Conclusion

• One crucial factor in any change process is the
  extent to which a company is aware of its culture
  and of the operational environment
• Even if the culture of a multinational
  organization needs to be changed, any
  transformation carried out will need to
• reflect the national culture
• ensure that the subsidiaries involved remain
  integral parts of the whole multinational