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Cross-Cultural Management 1 Chapter 3-Organizational Cultures and Diversity Chapter 3(1): Organisational Culture, Diversity &Multiculturalism Chapter 3(2):

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Presentation on theme: "Cross-Cultural Management 1 Chapter 3-Organizational Cultures and Diversity Chapter 3(1): Organisational Culture, Diversity &Multiculturalism Chapter 3(2):"— Presentation transcript:

1 Cross-Cultural Management 1 Chapter 3-Organizational Cultures and Diversity Chapter 3(1): Organisational Culture, Diversity &Multiculturalism Chapter 3(2): Organisational Culture Chapter 3(3): Diversity

2 Cross-Cultural Management 2 Chapter 3(1): Organisational Culture, Diversity & Multiculturalism

3 Cross-Cultural Management 3 Acknowledging Culture Cultural diversity can exist on a national and cross-national level Often, managers assume that culture does not play an important role in shaping practices => Universalistic approach: ‘if it works here, it will work there’ Such approach contributed to high failure rates in expatriate missions and international mergers In order to manage cross-cultural differences, managers need to acknowledge and understand them

4 Cross-Cultural Management 4 Diversity-Related Problems Increased ambiguity Increased complexity and confusion Difficulty to converge meanings and Miscommunication Lower cohesiveness Harder to reach agreement Harder to make decisions and agree on specific actions

5 Cross-Cultural Management 5 Diversity-Related Advantages Expanding meanings and Broader cognitive frame & resources Multiple perspectives Multiple interpretations Richer alternatives & more ideas Increased creativity and problem solving skills Increased flexibility

6 Cross-Cultural Management 6 Diversity and Types of Organizations Organizational culture affects the acceptance and impact of diversity in organizations Parochial: Our is the only way Ethnocentric: Our way is best Pluralistic (synergetic): The best is combining our ways and their ways In large companies, different divisions may have different sub-cultures The more complex, unpredictable and global is the business environment of a company, the more competitive advantages cultural diversity has.

7 Cross-Cultural Management 7 Nature of Organizational Culture Organizational culture –Pattern of basic assumptions that are developed by a group as it learns to cope with problems of external adaptation and internal integration and that are taught to new members as the correct way to perceive, think, and feel in relation to these problems –An MNC’s organizational culture in one country’s facility may differ sharply from those in other countries

8 Cross-Cultural Management 8 Nature of Organizational Culture Interaction Between National and Organizational Cultures –National cultural values of employees have a significant impact on organizational performance –Cultural values that employees bring to the workplace are not easily changed by the organization –Substantial differences may be observed among subsidiaries that cause coordination problems

9 Cross-Cultural Management 9 Organizational Cultures in MNCs Integration of organizational cultures is crucial following mergers and acquisitions –Integration process consists of: Establishing a common purpose, goal, and focus Identifying important organizational structures and roles Determining who has authority over resources Identifying the expectations of all involved parties and facilitating communication between the parties

10 Cross-Cultural Management 10 Organizational Cultures in MNCs (cont.) Family culture –Strong emphasis on hierarchy and person orientation Power-oriented with paternalistic leader Leader looked to for guidance Can catalyze and multiply employees’ energy Reliance on intuition rather than rational knowledge

11 Cross-Cultural Management 11 Organizational Cultures in MNCs (cont.) Eiffel tower culture –Strong emphasis on hierarchy and task orientation Employees know what to do Coordination from the top Methodic approach to motivating and rewarding people and resolving conflict

12 Cross-Cultural Management 12 Organizational Cultures in MNCs (cont.) Guided missile culture –Strong emphasis on equality in the workplace and orientation to the task Work typically undertaken by teams or project groups Low priority attached to hierarchical concerns Employs a “cybernetic” structure Culture may change quickly

13 Cross-Cultural Management 13 Organizational Cultures in MNCs (cont.) Incubator culture –Strong emphasis on equality & personal orientation Organizations are secondary to the fulfillment of individuals Organization is an incubator for self- expression and self-fulfillment Participants have intense emotional commitment to their work

14 Cross-Cultural Management 14 Organizational Cultures EIFFEL TOWER Rule-oriented culture Fulfillment-oriented culture INCUBATOR FAMILY Power-oriented culture Project-oriented culture GUIDED MISSILE Equity Hierarchy Task Emphasis Person Emphasis

15 Cross-Cultural Management 15 Processes & Implications Attraction-Selection-Attrition framework Where do you advertise for jobs? Who interviews and selects candidates? What type of people is the company (implicitly and explicitly) looking for? Who gets promoted? Mentoring Networking

16 Cross-Cultural Management 16 Examples Knowledge workers Medical doctors & nurses University academics

17 Cross-Cultural Management 17

18 Cross-Cultural Management 18

19 Cross-Cultural Management 19 Chapter 3(2) ORGANIZATIONAL CULTURE

20 Cross-Cultural Management 20 CULTURE REVIEWED Organizations also have a learned, shared, interrelated set of symbols and patterns of basic assumptions The culture help the organizations cope with problems it faces –external adaptation –internal integration

21 Cross-Cultural Management 21 CULTURE HELPS ORGANIZATIONS INTEGRATE INTERNALLY (PPS) AND ADAPT/SHAPE EXTERNALITIES (6 GLOBAL ENVIRONMENTS) TO SURVIVE. Culture permeates the organization –Through knowledge acquisition –Organizational symbols –Organizational stories –Organizational rites CULTURE REVIEWED

22 Cross-Cultural Management 22 ORGANIZATIONAL KNOWLEDGE Explicit—formalized and widely distributed Implicit—norms or “how we do things around here”

23 Cross-Cultural Management 23 EXAMINE ORGANIZATIONAL SYMBOLS What language is in use and where? Who is pictured on annual reports, web pages, or brochures? What colors represent the company; where are they used? What logos are in use?

24 Cross-Cultural Management 24 ORGANIZATIONAL STORIES TELL US what the employee is supposed to do when in doubt what to do when a high-status person breaks the rules how the little person advances within the organization

25 Cross-Cultural Management 25 ORGANIZATIONAL RITES REINFORM NORMS Rites of degradation dissolve a person’s organizational identity Rites of enhancement recognize accomplishments or enhance power Rites of renewal lubricate social relations Rites of conflict reduction reduces conflict by partitioning it Rites of integration revive common feeling

26 Cross-Cultural Management 26 NATIONS TRADITIONALLY SHAPE ORGANIZATIONS Business culture

27 Cross-Cultural Management 27 BUT INFLUENCES COME FROM MULTIPLE SOURCES Professional training/groups Family Subgroups, e.g., R&D or accounting

28 Cross-Cultural Management 28 INCREASINGLY WE ALSO SEE business influences come not only from domestic influences but also from international and global business activities, e.g., –subsidiaries –joint ventures and other strategic alliances

29 Cross-Cultural Management 29 OFTEN CREATING CULTURE CLASH between parent and subsidiary among managers

30 Cross-Cultural Management 30 THUS IN A GLOBAL WORLD, BUSINESSES BECOME CULTURAL CONDUITS See page 207 of Introduction to Globalization and Business by Barbara Parker

31 Cross-Cultural Management 31 BUSINESS INFLUENCES CULTURE THROUGH –Global entertainment and electronic media –Global travel –Global language –Global demographic groups Global elite Global teens –Business behaviors

32 Cross-Cultural Management 32 GLOBAL INFLUENCES OF BUSINESS ON CULTURE Make global businesses more central to –Cultural change –Cultural concerns –And cause them to interact more with social actors such as NGOs and governments

33 Cross-Cultural Management 33 Chapter 3(3) DIVERSITY

34 Cross-Cultural Management 34 Diversity Defined Human diversity –Visible –Less or invisible Diverse structural configurations Diverse processes

35 Cross-Cultural Management 35 Global Organizations Emphasize Inclusive Networks When They a) reexamine their norms or traditional ways of doing things b) seek and value similarities as well as differences as sources of competitive advantage, and c) train people for skills that enhance a sense of inclusion

36 Cross-Cultural Management 36 CommunicationsEducation and TrainingEmployee Involvement CEO speechesDiversity briefings for managers Task forces on diversity Written diversity policy; diversity brochures Awareness training for everyone Interest groups for members of diverse populations Second language publicationsDiversity skills trainingCompany time provided for diversity planning Reports to the public or to shareholders Multicultural team trainingNetworking groups Press releasesSexual harassment training Career DevelopmentPerformance and Accountability MentoringDefine behaviors that enhance inclusion Succession planning for diversity Monitor and report on diversity progress Individual development plansLink rewards to achieving diversity objectives Assign people to diverse jobs over a career Develop diversity measures that are both qualitative and quantitative Networking directories Diversity Initiatives

37 Cross-Cultural Management 37 Approaches to Managing Human Diversity Discrimination and fairness Access and legitimacy Learning

38 Cross-Cultural Management 38 Pressures for Diversity Low High Strategic Responses for Managing Diversity and their Implementation Episodic Freestanding Systemic 1 Deny an assignment to an employee because a client might object to the employee’s nationality, race, gender, age, etc. 2 Choose to risk fines or other costs, rather than engage in equal employment opportunity practices 3 Choose geographic locations for the business which avoid diversity / where the local workforce does not contain protected classes 4 In response to a governmental employment audit, provide a workshop for protected groups on “how to succeed by adapting to fit into the organization” 5 Regular sexual harassment training which focuses on how to avoid legal liability 6 Performance appraisal standards for managers include specific targets / quotas for hiring of protected groups 7 To increase diversity awareness for managers, bring in a speaker to tell them how to value the diversity of their employees 8 Sponsor an annual event that celebrates a protected group, e.g., Special Olympics 9 To ensure equal pay, program the HR computerized management system to annually review and adjust pay differentials between non-protected and protected groups 10 Pilot an employee network conference that engages employees and their managers in reciprocal learning activities 11 Regularly include vendors, suppliers, and customers in the organization’s diversity training offerings to increase their involvement in and contribution to diversity efforts 12 Different business units continually share information about their diversity successes and failures, then adapt and integrate them into their businesses Marginal Strategic Executive priorities for managing diversity Strategic responses for managing diversity Proactive Accom m odative Defensive Reactive

39 Cross-Cultural Management 39 Diverse Structures Hierarchical –Export office to functional to divisional to hybrids Internal horizontal –Networks, shamrocks, matrix, virtual Interorganizational –Joint ventures –Strategic alliances

40 Cross-Cultural Management 40 Diverse Processes IT—integration depends on infrastructures that vary HR—selection, development, and compensation in different nations and regions Labor practices and conditions Social responsibility and ethics initiatives


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