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Chapter 3-Organizational Cultures and Diversity

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

2 Chapter 3(1): Organisational Culture, Diversity & Multiculturalism

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 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 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 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 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 problems An 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 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 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 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 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 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 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 Organizational Cultures
Equity Fulfillment-oriented culture INCUBATOR Project-oriented culture GUIDED MISSILE Person Emphasis Task Emphasis FAMILY Power-oriented culture EIFFEL TOWER Rule-oriented culture Hierarchy

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 Examples Knowledge workers Medical doctors & nurses
University academics



This lecture applies cultural concepts to organizations.

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 The 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, FedEx Your 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 organization Through knowledge acquisition Organizational symbols Organizational stories Organizational rites

Explicit—formalized and widely distributed Implicit—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.

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.

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 An 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?

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 Organizational 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.

Business culture

Professional training/groups Family Subgroups, e.g., R&D or accounting

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

between parent and subsidiary among managers In practices considered “unnatural” to the subsidiary.

See page 207 of Introduction to Globalization and Business by Barbara Parker What’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.

Global entertainment and electronic media Global travel Global language Global demographic groups Global elite Global teens Business behaviors Global 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.

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 Chapter 3(3) DIVERSITY Ideally 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 configurations Diverse processes Human 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 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 Diversity Initiatives
Communications Education and Training Employee Involvement CEO speeches Diversity 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 publications Diversity skills training Company time provided for diversity planning Reports to the public or to shareholders Multicultural team training Networking groups Press releases Sexual harassment training Career Development Performance and Accountability Mentoring Define behaviors that enhance inclusion Succession planning for diversity Monitor and report on diversity progress Individual development plans Link rewards to achieving diversity objectives Assign people to diverse jobs over a career Develop diversity measures that are both qualitative and quantitative Networking directories

37 Approaches to Managing Human Diversity
Discrimination and fairness Access and legitimacy Learning Discrimination 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 Systemic Proactive Accommodative Defensive Reactive Strategic responses for managing diversity Low High Pressures for Diversity 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

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

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 These are major processes that have been difficult to integrate on a global level; just about every global firm deals with them.

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