organizational cultures and diversity
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Cha
pter 6
Organizational Cultures and Diversity
The specific objectives of this chapter are:
1. EXAMINE some of the major ethical issues and problems confronting MNCs in selected countries.
2. DISCUSS some of the pressures on and action being taken by selected industrialized countries and companies to be more socially responsive to world problems.
2
The Nature of Organizational Culture
Shared values and beliefs that enable members to understand their roles and the norms of the organization, including
Observed behavioral regularities, as typified by common language, terminology, and rituals.
Norms, as reflected by things such as the amount of work to be done and the degree of cooperation between management and employees.
Dominant values that the organization advocates and expects participants to share, such as high product and service quality, low absenteeism, and high efficiency.
Organizational culture
3
The Nature of Organizational Culture
A philosophy that is set forth in the MNC’s beliefs regarding how employees and customers should be treated.
Rules that dictate the do’s and don’ts of employee behavior relating to areas such as productivity, customer relations, and intergroup cooperation.
Organizational climate, or the overall atmosphere of the enterprise as reflected by the way that participants interact with each other, conduct themselves with customers, and feel about the way they are treated by higher-level management
Organizational culture Shared values and beliefs that enable members to understand
their roles and the norms of the organization, including
4
Interaction Between National and Organizational Cultures
National cultural values of employees may have a significant impact on their organizational performance
Cultural values employees bring to the workplace with them are not easily changed by the organization
5
Motivation
Cultural Variations
Table 6–1Dimensions of Corporate Culture
To be consistent and precise. To strive for accuracy and attention to detail. To refine and perfect. Get it right.
To be pioneers. To pursue clear aims and objectives. To innovate and progress. Go for it.
Activities Output
Relationship
To put the demands of the job before the needs of the individual.
To put the needs of the individual before the needs of the job.
Job Person
Identity
To identify with and uphold the expecta-tions of the employing organization.
To pursue the aims and ideals of each professional practice.
Corporate Professional
Adapted from Table 6.1: Dimensions of Corporate Culture
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Communication
Cultural Variations
Table 6–1Dimensions of Corporate Culture
To stimulate and encourage a full and free exchange of information and opinion.
To monitor and control the exchange and accessibility of information and opinion.
Open Closed
Control
To comply with clear and definite systmes and procedures.
To work flexibly and adaptively according to the needs of the situation.
Tight Loose
Adapted from Table 6.1: Dimensions of Corporate Culture
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Conduct
Cultural Variations
Table 6–1Dimensions of Corporate Culture
To put the expertise and standards of the employing organization first. To do what we know is right.
To put the demands and expectations of customers first. To do what they ask.
Conventional Pragmatic
Adapted from Table 6.1: Dimensions of Corporate Culture
Source: Reported in Lisa Hoecklin, Managing Cultural Differences: Strategies for Competitive Advantage (Workingham, England: Addison-Wesley, 1995), p. 146.
8
European’s Perceptions of Cultural Dimensions of 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
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European’s Perceptions of Cultural Dimensions of European 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
10
Characteristic
Table 6–2European Management Characteristics
Corporate Commercial Administrative Industrial Familial
Western Northern Eastern SouthernDimension (U.K.) (France) (Germany) (Italy)
Adapted from Table 6–2: European Management Characteristics
European Management Characteristics
Management attributesBehavior Experiential Professional Developmental ConvivialAttitude Sensation Thought Intuition Feeling
Institutional modelsFunction Salesmanship Control Production PersonnelStructure Transaction Hierarchy System Network
Societal ideasEconomics Free Market Dirigiste Social market CommunalPhilosophy Pragmatic Rational Holistic Humanistic
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Characteristic
Table 6–2European Management Characteristics
Western Northern Eastern SouthernDimension (U.K.) (France) (Germany) (Italy)
Adapted from Table 6–2: European Management Characteristics
European Management Characteristics
Cultural imagesArt Theatre Architecture Music DanceCulture (Anglo-Saxon) (Gallic) (Germanic) (Latin)
Source: Reported in Lisa Hoecklin, Managing Cultural Differences: Strategies for Competitive Advantage (Workingham, England: Addison-Wesley, 1995), p. 149.
12
Organizational Cultures in MNCs
There are four steps in the integration of organizational cultures in international expansions that result from mergers or acquisition1. The two groups have to establish the purpose, goal,
and focus of their merger2. They have to develop mechanisms to identify the
most important organizational structures and management roles
3. They have to determine who has authority over the resources needed for getting things done
4. They have to identify the expectations of all involved parties and facilitate communication between both departments and individuals in the structure
13
Organizational Cultures in MNCs
Three aspects of organizational functioning that are important in determining MNC organizational culture1. The general relationship between the
employees and their organization
2. The hierarchical system of authority that defines the roles of managers and subordinates
3. The general views that employees hold about the MNC’s purpose, destiny, goals, and their places in them.
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Organizational Cultures in MNCs
Adapted from Figure 6–2: 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
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Organizational Cultures in MNCs
Family culture Strong emphasis on hierarchy and
orientation to the person Family-type environment that is power
oriented and headed by a leader who is regarded as a caring parent
FAMILY
Power-oriented culture
Management looks after employees, and tries to ensure that they are treated well and have continued employment
May catalyze and multiply the energies of the personnel or end up supporting a leader who is ineffective and drains their energies and loyalties
16
Organizational Cultures in MNCs
Eiffel Tower Strong emphasis on hierarchy and
orientation to the task Jobs are well defined, and everything
is coordinated from the top This culture is narrow at the top, and
broad at the base Relationships are specific, and status remains with
the job. Managers seldom create off-the-job relationships
with their people, because they believe this could affect their rational judgment
This culture operates very much like a formal hierarchy—impersonal and efficient and loyalties
EIFFEL TOWER
Role-oriented culture
17
Organizational Cultures in MNCs
Guided missile Strong emphasis on equality in the
workplace and orientation to the task This culture is oriented to work Work typically is undertaken by
teams or project groups In projects, formal hierarchical considerations are
given low priority, and individual expertise is of greatest importance
All team members are equal (or at least potentially equal
All teams treat each other with respect, because they may need the other for assistance
Egalitarian and task-driven organizational culture
Project-oriented culture
GUIDED MISSILE
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Organizational Cultures in MNCs
Incubator Strong emphasis on equality and
personaI orientation Based on the premise that
organizations serve as incubators for the self-expression and self-fulfillment of their members
Little formal structure Participants in an incubator culture are there
primarily to perform roles such as confirming, criticizing, developing, finding resources for, or helping to complete the development of an innovative product or service
Fullfillment-oriented culture
INCUBATOR
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Table 6–3Summary Characteristics of the Four Corporate Culture
Relationshipsbetween employees
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Four Corporate Cultures
Diffuse relation-ships to organic whole to which one is bonded
Specific role inmechanical system ofrequired interaction
Specific tasks in cybernetic system targeted on shared objectives
Diffuse, spontaneous relationships growing out of shared creative process
Attitude towardauthority
Status is ascribed to parent figures who are close and powerful
Status is ascribed to superior roles that are distant yet powerful
Status is achieved by project group members who contribute to targeted goal
Status is achieved by Individuals Exemplifying creativity and growth
Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator
Ways of thinking and learning
Intuitive, holistic, lateral and error correcting
Logical, analytical, vertical, and rationally efficient
Problem centered, professional, practical, cross disciplinary
Process oriented, creative, ad hoc, inspirational
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Table 6–3Summary Characteristics of the Four Corporate Culture
Attitudes toward people
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Four Corporate Cultures
Family members Human resources Specialists and experts
Co-creators
Ways of changing “Father” changes Course
Change rules and procedures
Shift aim as target moves
Improvise and attune
Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator
Ways of motivating and rewarding
Intrinsic satisfaction in being loved and respected
Promotion to greater position, larger role
Pay or credit for performance and problems solved
Participation in the process of creating new realities
Management by subjectives
Management by job description
Management by objectives
Management by enthusiasm
21
Table 6–3Summary Characteristics of the Four Corporate Culture
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Four Corporate Cultures
Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator
Criticism and conflict resolution
Turn other cheek, save other’s face, do not lose power game
Criticism is accusation of irrationalism unless there are procedures to arbitrate conflicts
Constructive task related only, then admit error and correct fast
Improve creative idea, not negate it
Source: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business, 2nd ed. (Burr Ridge, IL: Irwin, 1998), p. 183.
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Table 6–4The Evolution of International Corporations
Primary Product/service Market Price Strategy orientation
Competitive Domestic Multidomestic Multinational Global strategy
Importance of Marginal Important Extremely Dominant world business important
Product/service New, unique More Completely Mass-customized standardized standardized
(commodity)
Product Process Engineering not Product and engineering engineering emphasized process emphasizedemphasized engineering
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
Adapted from Table 6–4: The Evolution of International Corporations
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Table 6–4The Evolution of International Corporations
Technology Proprietary Shared Widely shared Instantly and extensively shared
R&D/sales High Decreasing Very low Very high
Profit margin High Decreasing Very low High, yet immediately
decreasing
Competitors None Few Many Significant (few or many)
Market Small, domestic Large, Larger, Largest, global multidomestic multinational
Production Domestic Domestic and Multinational, Imports and location primary markets least cost exports
Adapted from Table 6–4: The Evolution of International Corporations
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
24
Table 6–4The Evolution of International Corporations
Exports None Growing, high Large, saturated Imports and potential exports
Structure Functional Functional with Multinational lines Global alliances, divisions international of business hierarchy
division
Centralized Decentralized Centralized Coordinated, decentralized
Primary Product/service Market Price Strategy orientation
Strategy Domestic Multidomestic Multinational Global
Perspective Ethnocentric Polycentric/ Multinational Global/regiocentric multicentric
Adapted from Table 6–4: The Evolution of International Corporations
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
25
Table 6–4The Evolution of International Corporations
Cultural Marginally Very Somewhat Critically sensitivity important important important important
With whom No one Clients Employees Employees and clients
Level No one Workers and Managers Executives clients
Strategic “One way”/ “Many good “One least-cost “Many good assumption one best way” ways” Way” Ways”
equifinality simultaneously
Adapted from Table 6–4: The Evolution of International Corporations
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), pp. 7–8.
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International Culture Diversity Focus
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.
27
Types of Multiculturalism
Domestic multiculturalism Multicultural and diverse workforce that operates in the
MNC’s home country
Group multiculturalism Homogeneous groups Token groups Bicultural groups Multicultural groups
28
Potential Problems Associated with Diversity
Attitudinal problems May cause a lack of cohesion that results in the unit’s
inability to take concerted action or to be productive
Perceptual problems When culturally diverse groups come together, they often
bring preconceived, erroneous stereotypes with them
Inaccurate biases. Inaccurate communication
29
Advantages of Diversity
Can enhance creativity, lead to better decisions, and result in more effective and productive performance
Can prevent groupthink Social conformity and pressures on individual members of a
group to conform and reach consensus
Can be very effective team under right conditions Tasks requiring innovativeness Activities must be determined by the stage of
team development
30
Highly ineffective
Average effectiveness
Highly effective
Understanding the Conditions for Effectiveness
Adapted from Figure 6–5: Group Effectiveness and Culture
31
Guidelines for Effectively Managing Culturally Diverse Groups
1. Select team members for their task-related abilities
2. Team members must recognize and be prepared to deal with their differences
3. Team leader must help the group to identify and define its overall goal
4. Members must have equal power so that everyone can participate in the process
5. All members must have mutual respect for each other.
6. Managers must give teams positive feedback on their process and output
32
Exercises Discussion Questions 1-4 (p. 175) Japan (p. 176) Good faith effort (p. 177) Euro Disney (p. 216)
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