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Understanding Cross-cultural Management

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Title: Understanding Cross-cultural Management


1
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

2
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

3
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

4
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

5
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

6
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

7
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

8
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

9
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
10
The mechanisms of change (Schein) (Continued)
Table 10.2 Mechanisms of cultural change Source
Schein (1989) p.66, Figure 4-3, adapted
11
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

12
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.

13
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

14
Cultural change in organizations
  • Concept 10.2

Organizational change in a global environment
15
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

16
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)

17
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

18
Mapping corporate culture change
Figure 10.1 The Competing Values
Framework Source Cameron and Quinn (1999), p.
32, Figure 3.1
19
The CV framework
Table 10.3 The characteristics of the CV
framework quadrants Source based on Cameron
Quinn (1999)
20
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.

21
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
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