Presentation on theme: "Organizational Cultures and Diversity"— Presentation transcript:
1 Organizational Cultures and Diversity The specific objectives of this chapter are:EXAMINE some of the major ethical issues and problems confronting MNCs in selected countries.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, includingObserved 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.
3 The Nature of Organizational Culture Shared values and beliefs that enable members to understand their roles and the norms of the organization, includingA 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
4 Interaction Between National and Organizational Cultures National cultural values of employees may have a significant impact on their organizational performanceCultural values employees bring to the workplace with them are not easily changed by the organization
5 Cultural Variations Table 6–1 Dimensions of Corporate Culture MotivationActivities OutputTo 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.RelationshipJob PersonTo 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.IdentityCorporate ProfessionalTo identify with and uphold the expecta-tions of the employing organization.To pursue the aims and ideals of each professional practice.Adapted from Table 6.1: Dimensions of Corporate Culture
6 Cultural Variations Table 6–1 Dimensions of Corporate Culture CommunicationOpen ClosedTo stimulate and encourage a full and free exchange of information and opinion.To monitor and control the exchange and accessibility of information and opinion.ControlTight LooseTo comply with clear and definite systmes and procedures.To work flexibly and adaptively according to the needs of the situation.Adapted from Table 6.1: Dimensions of Corporate Culture
7 Cultural Variations Table 6–1 Dimensions of Corporate Culture Conduct Conventional PragmaticTo 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.Source: Reported in Lisa Hoecklin, Managing Cultural Differences: Strategies for Competitive Advantage (Workingham, England: Addison-Wesley, 1995), p. 146.Adapted from Table 6.1: Dimensions of Corporate Culture
8 European’s Perceptions of Cultural Dimensions of U. S European’s Perceptions of Cultural Dimensions of U.S. Operations/Same MNCActivitiesJobCorporateOpenTightConventionalOutputsPersonProfessionalClosedLoosePragmaticAdapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and European Operations (B) of the Same MNC
9 European’s Perceptions of Cultural Dimensions of European Operations/Same MNC ActivitiesJobCorporateOpenTightConventionalOutputsPersonProfessionalClosedLoosePragmaticAdapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and European Operations (B) of the Same MNC
10 European Management Characteristics Table 6–2European Management CharacteristicsCharacteristicWestern Northern Eastern SouthernDimension (U.K.) (France) (Germany) (Italy)Corporate Commercial Administrative Industrial FamilialManagement attributesBehavior Experiential Professional Developmental ConvivialAttitude Sensation Thought Intuition FeelingInstitutional modelsFunction Salesmanship Control Production PersonnelStructure Transaction Hierarchy System NetworkSocietal ideasEconomics Free Market Dirigiste Social market CommunalPhilosophy Pragmatic Rational Holistic HumanisticAdapted from Table 6–2: European Management Characteristics
11 European Management Characteristics Table 6–2European Management CharacteristicsCharacteristicWestern Northern Eastern SouthernDimension (U.K.) (France) (Germany) (Italy)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.Adapted from Table 6–2: European Management Characteristics
12 Organizational Cultures in MNCs There are four steps in the integration of organizational cultures in international expansions that result from mergers or acquisitionThe two groups have to establish the purpose, goal, and focus of their mergerThey have to develop mechanisms to identify the most important organizational structures and management rolesThey have to determine who has authority over the resources needed for getting things doneThey 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 cultureThe general relationship between the employees and their organizationThe hierarchical system of authority that defines the roles of managers and subordinatesThe general views that employees hold about the MNC’s purpose, destiny, goals, and their places in them.
14 Organizational Cultures in MNCs EquityHierarchyFullfillment-oriented cultureINCUBATORProject-oriented cultureGUIDED MISSILEPerson EmphasisTask EmphasisFAMILYPower-oriented cultureEIFFEL TOWERRole-oriented cultureAdapted from Figure 6–2: Organizational Cultures
15 Organizational Cultures in MNCs Family cultureStrong emphasis on hierarchy and orientation to the personFamily-type environment that is power oriented and headed by a leader who is regarded as a caring parentFAMILYPower-oriented cultureManagement looks after employees, and tries to ensure that they are treated well and have continued employmentMay 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 TowerStrong emphasis on hierarchy and orientation to the taskJobs are well defined, and everything is coordinated from the topThis culture is narrow at the top, and broad at the baseEIFFEL TOWERRole-oriented cultureRelationships 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 judgmentThis culture operates very much like a formal hierarchy—impersonal and efficient and loyalties
17 Organizational Cultures in MNCs Guided missileStrong emphasis on equality in the workplace and orientation to the taskThis culture is oriented to workWork typically is undertaken by teams or project groupsProject-oriented cultureGUIDED MISSILEIn projects, formal hierarchical considerations are given low priority, and individual expertise is of greatest importanceAll team members are equal (or at least potentially equalAll teams treat each other with respect, because they may need the other for assistanceEgalitarian and task-driven organizational culture
18 Organizational Cultures in MNCs IncubatorStrong emphasis on equality and personaI orientationBased on the premise that organizations serve as incubators for the self-expression and self-fulfillment of their membersFullfillment-oriented cultureINCUBATORLittle formal structureParticipants 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
19 Four Corporate Cultures Table 6–3Summary Characteristics of the Four Corporate CultureCorporate CultureCharacteristicFamilyEiffel TowerGuided MissileIncubatorRelationshipsbetween employeesDiffuse relation-ships to organic whole to which one is bondedSpecific role inmechanical system ofrequired interactionSpecific tasks in cybernetic system targeted on shared objectivesDiffuse, spontaneous relationships growing out of shared creative processAttitude towardauthorityStatus is ascribed to parent figures who are close and powerfulStatus is ascribed to superior roles that are distant yet powerfulStatus is achieved by project group members who contribute to targeted goalStatus is achieved by Individuals Exemplifying creativity and growthWays of thinking and learningIntuitive, holistic, lateral and error correctingLogical, analytical, vertical, and rationally efficientProblem centered, professional, practical, cross disciplinaryProcess oriented, creative, ad hoc, inspirationalAdapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
20 Four Corporate Cultures Table 6–3Summary Characteristics of the Four Corporate CultureCorporate CultureCharacteristicFamilyEiffel TowerGuided MissileIncubatorAttitudes toward peopleFamily membersHuman resourcesSpecialists and expertsCo-creatorsWays of changing“Father” changes CourseChange rules and proceduresShift aim as target movesImprovise and attuneWays of motivating and rewardingIntrinsic satisfaction in being loved and respectedPromotion to greater position, larger rolePay or credit for performance and problems solvedParticipation in the process of creating new realitiesManagement by subjectivesManagement by job descriptionManagement by objectivesManagement by enthusiasmAdapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
21 Four Corporate Cultures Table 6–3Summary Characteristics of the Four Corporate CultureCorporate CultureCharacteristicFamilyEiffel TowerGuided MissileIncubatorCriticism and conflict resolutionTurn other cheek, save other’s face, do not lose power gameCriticism is accusation of irrationalism unless there are procedures to arbitrate conflictsConstructive task related only, then admit error and correct fastImprove creative idea, not negate itSource: 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.Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
22 Phases of Multicultural Development Table 6–4The Evolution of International CorporationsCharacteristics/ActivitiesPhase I (Domestic Corporations)Phase II (International Corporations)Phase III (Multinational Corporations)Phase IV (Global Corporations)Primary Product/service Market Price Strategy orientationCompetitive Domestic Multidomestic Multinational Global strategyImportance of Marginal Important Extremely Dominant world business importantProduct/service New, unique More Completely Mass-customized standardized standardized (commodity)Product Process Engineering not Product and engineering engineering emphasized process emphasized emphasized engineeringAdapted from Table 6–4: The Evolution of International Corporations
23 Phases of Multicultural Development Table 6–4The Evolution of International CorporationsCharacteristics/ActivitiesPhase I (Domestic Corporations)Phase II (International Corporations)Phase III (Multinational Corporations)Phase IV (Global Corporations)Technology Proprietary Shared Widely shared Instantly and extensively sharedR&D/sales High Decreasing Very low Very highProfit margin High Decreasing Very low High, yet immediately decreasingCompetitors None Few Many Significant (few or many)Market Small, domestic Large, Larger, Largest, global multidomestic multinationalProduction Domestic Domestic and Multinational, Imports and location primary markets least cost exportsAdapted from Table 6–4: The Evolution of International Corporations
24 Phases of Multicultural Development Table 6–4The Evolution of International CorporationsCharacteristics/ActivitiesPhase I (Domestic Corporations)Phase II (International Corporations)Phase III (Multinational Corporations)Phase IV (Global Corporations)Exports None Growing, high Large, saturated Imports and potential exportsStructure Functional Functional with Multinational lines Global alliances, divisions international of business hierarchy divisionCentralized Decentralized Centralized Coordinated, decentralizedPrimary Product/service Market Price Strategy orientationStrategy Domestic Multidomestic Multinational GlobalPerspective Ethnocentric Polycentric/ Multinational Global/ regiocentric multicentricAdapted from Table 6–4: The Evolution of International Corporations
25 Phases of Multicultural Development Table 6–4The Evolution of International CorporationsCharacteristics/ActivitiesPhase I (Domestic Corporations)Phase II (International Corporations)Phase III (Multinational Corporations)Phase IV (Global Corporations)Cultural Marginally Very Somewhat Critically sensitivity important important important importantWith whom No one Clients Employees Employees and clientsLevel No one Workers and Managers Executives clientsStrategic “One way”/ “Many good “One least-cost “Many good assumption one best way” ways” Way” Ways” equifinality simultaneouslySource: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), pp. 7–8.Adapted from Table 6–4: The Evolution of International Corporations
26 International Culture Diversity Focus Phase1Domestic firmsPhase2International firmsPhase3Multinational firmsPhase4Global firmsSource: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), p. 123.
27 Types of Multiculturalism Domestic multiculturalismMulticultural and diverse workforce that operates in the MNC’s home countryGroup multiculturalismHomogeneous groupsToken groupsBicultural groupsMulticultural groups
28 Potential Problems Associated with Diversity Attitudinal problemsMay cause a lack of cohesion that results in the unit’s inability to take concerted action or to be productivePerceptual problemsWhen culturally diverse groups come together, they often bring preconceived, erroneous stereotypes with themInaccurate biases.Inaccurate communication
29 Advantages of Diversity Can enhance creativity, lead to better decisions, and result in more effective and productive performanceCan prevent groupthinkSocial conformity and pressures on individual members of a group to conform and reach consensusCan be very effective team under right conditionsTasks requiring innovativenessActivities must be determined by the stage of team development
30 Understanding the Conditions for Effectiveness Highly ineffectiveAverage effectivenessHighly effectiveAdapted from Figure 6–5: Group Effectiveness and Culture
31 Guidelines for Effectively Managing Culturally Diverse Groups Select team members for their task-related abilitiesTeam members must recognize and be prepared to deal with their differencesTeam leader must help the group to identify and define its overall goalMembers must have equal power so that everyone can participate in the processAll members must have mutual respect for each other.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)