3 Acknowledging Culture Cultural diversity can exist on a national and cross-national levelOften, 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 mergersIn order to manage cross-cultural differences, managers need to acknowledge and understand them
4 Diversity-Related Problems Increased ambiguityIncreased complexity and confusionDifficulty to converge meanings andMiscommunicationLower cohesivenessHarder to reach agreementHarder to make decisions and agree on specific actions
5 Diversity-Related Advantages Expanding meanings andBroader cognitive frame & resourcesMultiple perspectivesMultiple interpretationsRicher alternatives & more ideasIncreased creativity and problem solving skillsIncreased flexibility
6 Diversity and Types of Organizations Organizational culture affects the acceptance and impact of diversity in organizationsParochial: Our is the only wayEthnocentric: Our way is bestPluralistic (synergetic): The best is combining our ways and their waysIn large companies, different divisions may have different sub-culturesThe more complex, unpredictable and global is the business environment of a company, the more competitive advantages cultural diversity has.
7 Nature of 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 problemsAn MNC’s organizational culture in one country’s facility may differ sharply from those in other countries
8 Nature of Organizational Culture Interaction Between National and Organizational CulturesNational cultural values of employees have a significant impact on organizational performanceCultural values that employees bring to the workplace are not easily changed by the organizationSubstantial differences may be observed among subsidiaries that cause coordination problems
9 Organizational Cultures in MNCs Integration of organizational cultures is crucial following mergers and acquisitionsIntegration process consists of:Establishing a common purpose, goal, and focusIdentifying important organizational structures and rolesDetermining who has authority over resourcesIdentifying the expectations of all involved parties and facilitating communication between the parties
10 Organizational Cultures in MNCs (cont.) Family cultureStrong emphasis on hierarchy and person orientationPower-oriented with paternalistic leaderLeader looked to for guidanceCan catalyze and multiply employees’ energyReliance on intuition rather than rational knowledge
11 Organizational Cultures in MNCs (cont.) Eiffel tower cultureStrong emphasis on hierarchy and task orientationEmployees know what to doCoordination from the topMethodic approach to motivating and rewarding people and resolving conflict
12 Organizational Cultures in MNCs (cont.) Guided missile cultureStrong emphasis on equality in the workplace and orientation to the taskWork typically undertaken by teams or project groupsLow priority attached to hierarchical concernsEmploys a “cybernetic” structureCulture may change quickly
13 Organizational Cultures in MNCs (cont.) Incubator cultureStrong emphasis on equality & personal orientationOrganizations are secondary to the fulfillment of individualsOrganization is an incubator for self-expression and self-fulfillmentParticipants have intense emotional commitment to their work
15 Processes & Implications Attraction-Selection-Attrition frameworkWhere 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?MentoringNetworking
16 Examples Knowledge workers Medical doctors & nurses University academics
19 Chapter 3(2) ORGANIZATIONAL CULTURE This lecture applies cultural concepts to organizations.
20 CULTURE REVIEWEDOrganizations also have a learned, shared, interrelated set of symbols and patterns of basic assumptionsThe culture help the organizations cope with problems it facesexternal adaptationinternal integrationThe introductory case highlights MTV, a Viacom business that has a very distinctive culture.Other firms with distinctive cultures include Disney, Microsoft, Nike, Wal-Mart, Siemens, Toyota, FedExYour studies of global firms will demonstrate that each has a corporate culture, but these cultures differ from one another; some are strong, some weak.A good example of organizational culture is Walt Disney Corp. (if available show potion of Mickey Mouse Monopoly video—see document for details).As early as 1958, Roy Disney as president said “integration is the key word around here.”Disney has a deeply rooted corporate culture that self-reinforces. For example, Mickey is embedded in everything: buildings, furniture, even the toilet paper at Disney resorts are embossed with a Mickey logo. Everyone is a “cast” member—meaning they are always performing. Bosses are “leads,” and executives dress up as characters from time to time to wander the theme parks. The underground transit systems help to emphasize that everything happens as if by “magic.”
21 CULTURE REVIEWED Culture permeates the organization CULTURE HELPS ORGANIZATIONS INTEGRATE INTERNALLY (PPS) AND ADAPT/SHAPE EXTERNALITIES (6 GLOBAL ENVIRONMENTS) TO SURVIVE.Culture permeates the organizationThrough knowledge acquisitionOrganizational symbolsOrganizational storiesOrganizational rites
22 ORGANIZATIONAL KNOWLEDGE Explicit—formalized and widely distributedImplicit—norms or “how we do things around here”Explicit knowledge about culture is usually formalized and widely distributed in printed statements of values, beliefs, or mission.
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?Even a glance at who is pictured on an annual report can tell us much about the organization and what it represents. Organizations sometimes develop their own unique language to convey a particular cultural value. For example, Nike's "Just do it" campaign reflected their preference for action. Organizations also convey messages in verbal and nonverbal forms. For example, logo colors and pictures convey a particular image of the organization.
24 ORGANIZATIONAL STORIES TELL US what the employee is supposed to do when in doubtwhat to do when a high-status person breaks the ruleshow the little person advances within the organizationAn example: the 2004 CEO of PepsiCo was featured in an article that reported that on a family outing, the CEO had left a restaurant because they only served Coca Cola. What’s the message this story tells about how people at Pepsi are supposed to view the product?
25 ORGANIZATIONAL RITES REINFORM NORMS Rites of degradation dissolve a person’s organizational identityRites of enhancement recognize accomplishments or enhance powerRites of renewal lubricate social relationsRites of conflict reduction reduces conflict by partitioning itRites of integration revive common feelingOrganizational rites of passage such as a promotion party honor the transition from one role to another. Rites of renewal such as year-end parties help to lubricate social relations, and rites of integration such as team-building exercises or executive retreats may revive or develop a shared sense of organizational purpose.
26 NATIONS TRADITIONALLY SHAPE ORGANIZATIONS Business culture
27 BUT INFLUENCES COME FROM MULTIPLE SOURCES Professional training/groupsFamilySubgroups, e.g., R&D or accounting
28 INCREASINGLY WE ALSO SEE business influences come not only from domestic influences but also from international and global business activities, e.g.,subsidiariesjoint ventures and other strategic alliances
29 OFTEN CREATING CULTURE CLASH between parent and subsidiaryamong managersIn practices considered “unnatural” to the subsidiary.
30 THUS IN A GLOBAL WORLD, BUSINESSES BECOME CULTURAL CONDUITS See page 207 of Introduction to Globalization and Business by Barbara ParkerWhat’s the role of business in cultural globalization?Businesses have been cultural conduits and in the past adopted and transmitted norms of their national cultures.As the business world becomes more interdependent worldwide, more businesses go global to become shapers of a hybridized global culture.
31 BUSINESS INFLUENCES CULTURE THROUGH Global entertainment and electronic mediaGlobal travelGlobal languageGlobal demographic groupsGlobal eliteGlobal teensBusiness behaviorsGlobal language of business has been English. According to UNESCO, reported in The Economist Special report Babel runs backwards. January 1, 2005, pp. 62–4. Mandarin Chinese is spoken by about a billion people (only about 100 million speak English), half a billion speak English, a little less than 400 million Speanish, 400 million Hindi, 2.3 million Arabic, 2.2 Bengali, 180 million, Russian, followed by Portuguese, Japanese, German, and French.
32 GLOBAL INFLUENCES OF BUSINESS ON CULTURE Make global businesses more central toCultural changeCultural concernsAnd cause them to interact more with social actors such as NGOs and governments
33 Chapter 3(3) DIVERSITYIdeally diversity in the workforce makes global organizations more alert and responsive to their world.
34 Diversity Defined Human diversity Visible Less or invisible Diverse structural configurationsDiverse processesHuman diversity is important to organizations when it is important to the individuals who represent it.Visible forms of diversity: gender, race, nationality, age, and physical abilities.Less visible but no less important: religion, marital status, sexual orientation, values, or economic class.Often forgotten is that organizations manage different structural configurations at the same time. In particular, mergers and acquisitions introduce new structural needs; joint ventures differ from wholly owned subsidiaries.Structural diversity results from activities that involve decision-sharing such as strategic alliances and cross-sectoral partnerships. Depending on the types of businesses held in the corporate portfolio, companies may need to structure for diversity in products/services or nations served.Diverse processes—often due to acquisitions and mergers, different HR systems, information systems, etc. Levi Strauss uses the same human resource management principles everywhere. At the same time, due to national differences, Levi does not compensate everyone the same worldwide. The result is diverse compensation systems dependent on national economic practices. In other cases, technological factors may constrain integration of worldwide processes. For example, a weak telecommunications infrastructure in many African nations limits Internet use as a company-wide communication medium.All these forms of diversity challenge seamless integration.
35 Global Organizations Emphasize Inclusive Networks When They a) reexamine their norms or traditional ways of doing thingsb) seek and value similarities as well as differences as sources of competitive advantage, andc) train people for skills that enhance a sense of inclusion
36 Diversity Initiatives CommunicationsEducation and TrainingEmployee InvolvementCEO speechesDiversity briefings for managersTask forces on diversityWritten diversity policy; diversity brochuresAwareness training for everyoneInterest groups for members of diverse populationsSecond language publicationsDiversity skills trainingCompany time provided for diversity planningReports to the public or to shareholdersMulticultural team trainingNetworking groupsPress releasesSexual harassment trainingCareer DevelopmentPerformance and AccountabilityMentoringDefine behaviors that enhance inclusionSuccession planning for diversityMonitor and report on diversity progressIndividual development plansLink rewards to achieving diversity objectivesAssign people to diverse jobs over a careerDevelop diversity measures that are both qualitative and quantitativeNetworking directories
37 Approaches to Managing Human Diversity Discrimination and fairnessAccess and legitimacyLearningDiscrimination and fairness: this approach assumes that prejudice has kept members of certain groups out of organizations and can be remedied by focusing on equal opportunity, fair treatment, and compliance with legal demands, e.g., EEO in the U.S. Remedies consistent with this paradigm favor assimilation such that newcomers become more like existing employees.Acces and legitimacy: the access and legitimacy paradigm emerged from the competitive business climate of the 1980s and 1990s, relying more on acceptance and valuing of difference than the discrimination and fairness paradigm. This paradigm was motivated by awareness that diversity outside the organization required greater diversity within. Among the limitations of this paradigm is that it accepts diversity without really understanding how diversity can or does change the way work is accomplished. Although boundaries to acceptance can be transcended with this paradigm, boundaries to understanding remain.Learning is a third and emerging paradigm. This perspective not only values diversity, it also argues that differences in perspectives can help organizations learn. Like the fairness paradigm it promotes equal opportunity and like the access paradigm it acknowledges cultural differences, but it transcends both to make learning the glue through which an organization integrates because of its differences, not in spite of them.These perspectives do not stand alone but are instead integrated with other organizational initiatives; people, processes, structures to look like the following slide.
38 Strategic Responses for Managing Diversity and their Implementation Episodic Freestanding SystemicProactive Accommodative Defensive ReactiveStrategic responses for managing diversityLow HighPressures for Diversity1Deny an assignment to an employee because a client might object to the employee’s nationality, race, gender, age, etc.2Choose to risk fines or other costs, rather than engage in equal employment opportunity practices3Choose geographic locations for the business which avoid diversity / where the local workforce does not contain protected classes4In response to a governmental employment audit, provide a workshop for protected groups on “how to succeed by adapting to fit into the organization”5Regular sexual harassment training which focuses on how to avoid legal liability6Performance appraisal standards for managers include specific targets / quotas for hiring of protected groups7To increase diversity awareness for managers, bring in a speaker to tell them how to value the diversity of their employees8Sponsor an annual event that celebrates a protected group, e.g., Special Olympics9To ensure equal pay, program the HR computerized management system to annually review and adjust pay differentials between non-protected and protected groups10Pilot an employee network conference that engages employees and their managers in reciprocal learning activities11Regularly include vendors, suppliers, and customers in the organization’s diversity training offerings to increase their involvement in and contribution to diversity efforts12Different business units continually share information about their diversity successes and failures, then adapt and integrate them into their businessesMarginal StrategicExecutive priorities for managing diversity
39 Diverse Structures Hierarchical Export office to functional to divisional to hybridsInternal horizontalNetworks, shamrocks, matrix, virtualInterorganizationalJoint venturesStrategic alliances
40 Diverse Processes IT—integration depends on infrastructures that vary HR—selection, development, and compensation in different nations and regionsLabor practices and conditionsSocial responsibility and ethics initiativesThese are major processes that have been difficult to integrate on a global level; just about every global firm deals with them.