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SI/HUT DIEM 2002 TU-53.309 Cross-cultural management Implications of culture on organizations, management and leadership 31.10.2002 Stina Immonen.

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Presentation on theme: "SI/HUT DIEM 2002 TU-53.309 Cross-cultural management Implications of culture on organizations, management and leadership 31.10.2002 Stina Immonen."— Presentation transcript:

1 SI/HUT DIEM 2002 TU Cross-cultural management Implications of culture on organizations, management and leadership Stina Immonen

2 SI/HUT DIEM 2002 Content Advancements of cross-cultural management studies from the viewpoint of OB Impact of cross-cultural issues on organizations, teams and individuals Research conducted at HUT DIEM

3 SI/HUT DIEM 2002 Advancements in CCM research

4 SI/HUT DIEM 2002 Trends in studies on international organizational behavior (Adler & Bartholomew 1992) Focus has shifted from single country and comparative research to studies on international interaction Impact of culture on managerial behavior has been recognized Academics and professionals generate together knowledge relevant to global business

5 SI/HUT DIEM 2002 Trend one: The shift to interaction1/2 Evolution phases of multinational enterprises domestic firms cross-cultural management is of minimal interest multi-domestic firms growing to international markets polycentric or regiocentric expansion through developing structures competition in each national market need for comparative understanding of cultural differences

6 SI/HUT DIEM 2002 Trend one: The shift to interaction2/2 multi-national firms globally integrating geographically dispersed operations (multiple foreign subsidiaries) minimizing the impact of cultural diversity assimilation of cultures into one dominant organizational culture comparative and international interaction research needed transnational firms developing and diffusing innovations strategic alliances and partnerships local responsiveness and global integration using cultural synergy as an advantage cross-cultural interaction research

7 SI/HUT DIEM 2002 Trend two: The recognition of culture’s importance 1/2 Multi-domestic and multinational phases have emphasized cultural influence by the dominant partner => managers’ behavior was becoming more similar (convergence) supported by hierarchies and organizational structures Transnational phase emphasizes networks of equal status players and minimal national cultural dominance in the relationships => managers’ behavior maintains its dissimilarities (divergence)

8 SI/HUT DIEM 2002 Trend two: The recognition of culture’s importance 2/2 How do managers learn from each other as equals? collaborative learning rather than influence, compromise and adaptation Understanding and managing human dynamics of global firms continuous international interaction within and between firms as networks of equals collaboration and learning of people from different cultures

9 SI/HUT DIEM 2002 Trend three: The academic/ professional community discourse Interaction between academic and professional communities stimulates relevant research International OB/HRM articles Shortens the “cycle time” between changes in firms’ competitive environment and changes in scholars’ conceptualizations just-in-time research Creates a larger body of knowledge of international organizational behavior

10 SI/HUT DIEM 2002 Conclusions Advancements in international business Interaction between researchers and practionnaires Increased need of knowledge have developed CCM research

11 SI/HUT DIEM 2002 Approaches to study cross-cultural management Foreign national, one country approach understanding national cultures Comparative international, two or more countries understanding differences between cultures International interaction, interaction within and between organizations that have members from two or more countries understanding the synergy of cultures

12 SI/HUT DIEM 2002 Impact of cross-cultural issues on organizations

13 SI/HUT DIEM 2002 Cross-cultural issues on organizational level Organizational structure and design stage of internationalization and view of proper management method of control and coordination international human resource management

14 SI/HUT DIEM 2002 Stages of internationalization (Dowling et al. 1999) Parent-subsidiary companies direct control – parent-country nationals as managers International division ethnocentric approach with local expertise – host-country nationals as managers Global division centralization - decentralization Matrix joint authority of geographical and product divisions, matching the structure to the decision-making Heterarchy, transnationals, networks less focus on the structure, more focus on developing the abilities, behavior and performance of individual managers

15 SI/HUT DIEM 2002 Method of control in multinational enterprises (Marchan et al. 1996) Formal Structure Reporting systems Budgets Performance targets Informal Personal relationships Corporate culture

16 SI/HUT DIEM 2002 International human resource management – three dimensions (Dowling et al. 1999, Morgan 1986) Human resource activities Human resource planning, staffing, performance management, training and development, compensation and benefits, labor relations Countries of operations Host country, home country, other country Types of employees HCNs, PCNs, TCNs

17 SI/HUT DIEM 2002 Models of culture e.g. Hofstede’s model (1980, 1997) power distance collectivism-individualism uncertainty avoidance masculinity-femininity Hall (1976, 1981): High and low context communication

18 SI/HUT DIEM 2002 have been used in explaining differences in organizational structures decision-making processes manager-subordinate relations commitment to organization etc.

19 SI/HUT DIEM 2002 Examples of cultural classifications and their influences on management (Rodrigues, 1996) Large power distance Small power distance Collectivism Individualism Authoritative decision- making and leadership styles Participative and consultative styles Reliance on informal controls, team approach Reliance on formal controls

20 SI/HUT DIEM 2002 Strong uncertainty avoidance Weak uncertainty avoidance Masculinity Femininity Mechanistic organization Organic organizational structures Equal employment opportunities maybe resisted by males Equal employment opportunities less resisted

21 SI/HUT DIEM 2002 High-context cultures (e.g. Chinese, Korean, Japanese, Vietnamese, Arab, Greek, Spanish culture) Low-context cultures (e.g. Italian, English, North American, Scandinavian, Swiss, German culture) Business transactions and negotiations are slow in pace Business transactions and negotiations are fast in pace

22 SI/HUT DIEM 2002 Cross-cultural issues on team level Teams communication leadership

23 SI/HUT DIEM 2002 Multi-cultural teams Definition team members are from more than one national culture often members represent different organizational/ professional cultures Communication ”more to do with realizing right responses than sending the ”right” messages” – cultural awareness and language to use the verbal and non verbal symbols e.g speed of messages, context, information flow, importance of completion differ accross cultures (Hall & Hall 1989) attitude towards conflict and risk

24 SI/HUT DIEM 2002 Multi-cultural teams Leadership ”rather to apply different leadership styles than to try to find synergy between different national cultures” (Mäkilouko, 2001) aims to strengthen motivation and commitment to organization relationship oriented leadership task oriented leadership degree of empowerment, participation in decision- making

25 SI/HUT DIEM 2002 Adapted from Tuckman (1965), Katzenbach & Smith (1993), Montebello (1994) and Jassawal & Sashittal (1999)

26 SI/HUT DIEM 2002 MC, CF team success factors from AIRBUS case

27 SI/HUT DIEM 2002 Cross-cultural issues on individual level Individuals expatriation process inpatriation process repatriation process

28 SI/HUT DIEM 2002 Expatriate performance Selection: technical skills, cross-cultural suitability, family requirements, country-cultural requirements, language, MNE requirements Predeparture training program Compensation package Task roles and duration of assignment Headquarter’s support: employee contract and support to family Host environment: phase of internationalization, emergent market or mature operation Cultural adjustment: “the U-curve”

29 SI/HUT DIEM 2002 Inpatriation Host country nationals’ transfers to parent country Breaking down the uniculture Influx of inpatriates helps employee identification with worldwide organization Selection as expatriates Facilitating subsidiary learning and integration Predeparture training programs

30 SI/HUT DIEM 2002 Repatriation process Returning to parent country preparation for repatriation (often negleted!) physical relocation and transition – personalized assistance and support from parent company readjustment career anxiety devaluing the international experience coping with new role demands: crossing corporate boundary loss of status and pay

31 SI/HUT DIEM 2002 Conclusion Cross-cultural awareness is needed in managing internationalization process on organizational level in managing team processes on individual level

32 SI/HUT DIEM 2002 CCM research at HUT DIEM

33 SI/HUT DIEM 2002 Examples on cross-cultural management research at HUT DIEM Research themes Culture’s impact on experienced employee well- being (Järvenpää et al. 1993, 1997, Järvenpää & Immonen, 1996) comparison of experienced job content and job stress between Finnish and US office workers, impact of organizational and national culture on management practices and organizational design, , Finnish and US public and private sector CCM understanding on occupational group, organizational and industry level by comparative studies; surveys

34 SI/HUT DIEM 2002 Examples on cross-cultural management research at HUT DIEM Research themes Culture’s impact on managerial behavior (Immonen et al. 1994, Hyttinen & Immonen, 1994, Järvenpää & Immonen, 1996) comparison of US and Finnish managers on time spent on interaction, CCM understanding on amount of interaction in managers’ work. Units of analysis: type of work and organization Comparative studies: structured observation

35 SI/HUT DIEM 2002 Examples on cross-cultural management research at HUT DIEM Research themes Management of networked organizations (Immonen & Järvenpää, 1998, Pinson et al. 2000, Thomas et al. 2000) organization culture and leadership in networked electronics industry, cross-cultural challenges of de-located product development, CCM understanding on geographically dispersed operations and global integration Case study approach; documentation, surveys, interviews, site visits

36 SI/HUT DIEM 2002 Examples on cross-cultural management research at HUT DIEM Research themes Challenges of international interaction on global business, organizational and individual level, (Teerikangas 2001, Järvenpää & Immonen, 2002) Finnish experiences from joint ventures and acquisitions in Japan and China managing global virtual teams managing “born-global” companies CCM understanding on global business and transnational company level by case studies; documentation, interviews, site visits

37 SI/HUT DIEM 2002 References Adler, N. & Bartholomew, S. (1992) Academic and professional communities of discourse: Generating knowledge on transnational human resource management. Journal of International Business Studies, 23:3, Carayon, P. and Järvenpää, E., (2001) Cross-cultural factors in macroergonomics. In W. Karwowski (Ed.) International Encyclopedia of Ergonomics and Human Factors. Taylor and Francis, Florence, Inc., pp Cowling, A., Stanworth, M., Bennet, R., Curran, J. & Lyons, P. (1988) Behavioural sciences for managers. London: Arnold. Delhaye, J-L., Bröcker, A., Ylitalo, J. & Immonen, S. (2000) MUSCLES Multi-Site Concurrent Engineering for Large Aircraft Engineering and Support. In Weber, F. & Pawar, K.S. (eds.) Proceedings of the 6 th International Conference on Concurrent Enterprising. Nottingham: Centre for Concurrent Enterprising, Dowling, P., Welch, D. & Schuler, R. (1999) International human resource management. Managing people in a multinational context. Toronto: South-Western College Publishing. Hyttinen, M. & Immonen, S. (1994) Organisaatiokulttuuri ja johtamistapa eri toimintaympäristöissä. (Organizational culture and supervisory behavior in different environments) Hallinnon tutkimus 13, Immonen, S., Hyttinen, M. & Komaki, J. (1994) Managers' way of interacting and successful leadership: A cross- cultural evaluation. 23rd International Congress of Applied Psychology, July 17-22, Madrid, 27. Immonen, S. & Järvenpää, E. (1998) Building Network Organizations - Implications for Organizational Culture and Leadership. In P. Vink, E.A.P. Koningsveld & S. Dhondt (Eds.) Human Factors in Organizational Design and Management VI. Elsevier: Amsterdam, Jassawalla, A.R. & Sashittal, H.C. (1999) Building collaborative cross-functional new product teams. Academy of Management Executive 13 (3), Katzenbach, J.R & Smith, D.K (1993) The Wisdom of Teams – Creating the high performance organizations. Boston, Harvard Business School Press. Järvenpää, E., Carayon, P., Hajnal, C., Lim, S.-Y., and Yang, C.-L., (1993) A cross-cultural framework for the study of stress among computer users: comparison of the USA and Finland. In M. J. Smith, G. Salvendy, (Eds.) Human-Computer Interaction: Applications and Case Studies. The Netherlands: Elsevier, Amsterdam, pp

38 SI/HUT DIEM 2002 References Järvenpää, E., Carayon, P., Derjami-Bayeh, A., (1997) The fit between national and organizational cultures from the employee point of view (L'adéquation entre les cultures nationales et organisationnelles vue par les employés). In Industrial Engineering in a world without borders. 2ème Congrès International Franco-Québécois. September Albi, France: Ecole des Mines d’Albi. Järvenpää, E. & Immonen, S. (1996) Cross-cultural aspects in job stress and managerial behavior. In W. Hacker, P. Richter, & T. Wagner (toim.) Analysis and design of mental work. Dresden: Dresden University of Technology, Järvenpää, E. & Immonen, S. (2002) Challenges of cross-cultural management: Case studies in Finnish companies. A paper accepted to be published in Proceedings of the Project Management Global Conference, Hong Kong, March , Montebello, A.R. (1994) Work teams that work: skills for managing across the organization. USA, Best Sellers Publishing. Morgan, P. (1986) International human resource management. Fact or Fiction. Personnel Administrator, 31,9,43-47 Pinson, L., Immonen, S. & Ylitalo, J. (2000) Description of a team life cycle. MUSCLES Technical Document. Task %20Description%20of%20team%20life%20cycle_vB.pdf 3%20Description%20of%20team%20life%20cycle_vB.pdf Mäkilouko, M. (2001) Leading multinational project teams: Forman, country specific perspective. Dissertation. Tampere University of Technology Publications 343. Rodrigues, C. (1998) Cultural classification of societies and how the affect cross-cultural management. Cross Cultural Management. 5:3, Teerikangas, S., Riekkinen, V., Järvenpää, E. and Immonen, S., (2001) The impact of culture on Finnish project business: case of a Sino-Finnish joint venture. A paper presented at the 6 th Workshop in international business at the University of Vaasa, Finland, August 26-28, Thomas, H., Carver, E., Harmer, S., Immonen, S. & Bröcker A. (2000) Models for analysing human resources and organisation. MUSCLES Technical Document. Task Tuckman, B.W. & Jensen, M.A.C. (1977) Stages of Small Group Development Revisited. Group and Organisational Studies, 2, pp

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