Ch.3 Organizational Culture Ch.4 Global Environment Very IMPORTANT topics today!!! Part II Defining the Manager’s Terrain Ch.3 Organizational Culture Ch.4 Global Environment Ch.5 Managerial Ethics © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST Today’s Agenda Short review – basic concepts (Ch.1) & development of Management (Ch. 2) Ch.3 & 4 – Culture (organizational and national) Ch.4 – Managing in a Global environment Tutorial – video, discussions (work with your teammates starting today!) © Emily & Jian, MGTO120 Summer 2006, HKUST

Management (Robbins & Coulter) Where We Are Today Management (Robbins & Coulter) Part 1 Basic Concepts (Ch1) Part 1 Retrospect (ch2) Part 2 Context (ch3-5) Part 3 Planning (ch6-9) Part 4 Organizing (Ch10-13) Part 5 Leading (Ch 14-17) Part 6 Controlling (Ch 18,19) © Emily & Jian, MGTO120 Summer 2006, HKUST

Ch.3 Organizational Culture and the Environment Learning objectives: Contrast the omnipotent and symbolic views of managers Discuss what is organizational culture Describe the seven dimensions of org. culture. Explain the source of an organization’s culture and how that culture continues. Describe how culture is transmitted to employees. Discuss the current Organizational Issues Facing Managers © Emily & Jian, MGTO120 Summer 2006, HKUST

Omnipotent vs. Symbolic view of managers Omnipotent View of Management Managers are directly responsible for an organization’s success or failure. The quality of the organization is determined by the quality of its managers. Managers are held most accountable for an organization’s performance yet it is difficult to attribute good or poor performance directly to their influence on the organization. Symbolic View of Management Much of an organization’s success or failure is due to external forces outside of managers’ control. The ability of managers to affect outcomes is influenced and constrained by external factors. The economy, customers, governmental policies, competitors, industry conditions, technology, and the actions of previous managers Managers symbolize control and influence through their action. © Emily & Jian, MGTO120 Summer 2006, HKUST

Parameters of Managerial Discretion To what extent, managers are the reasons? Parameters of Managerial Discretion © Emily & Jian, MGTO120 Summer 2006, HKUST

Do you “feel” the differences? Which is better?? Company A We can work at home. We have our own offices. It is cozy like home. We work together to solve problems. We are all colleagues and friends here. We feel free to voice when we see bad things. Those who have new ideas are respected and awarded. Company B Work hours are strict. We are clearly told what to do next. It is clear I get the pay if I do as I’s told to do. We don’t need much “privacy” in work. It is clear who is supervisor and who is subordinate. We’d better follow the current procedures in our work. © Emily & Jian, MGTO120 Summer 2006, HKUST

What is an Organizational Culture? A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other. “The way we do things around here.” Values, symbols, rituals, myths, and practices Implications: Culture is a perception. Culture is shared. Culture is descriptive. © Emily & Jian, MGTO120 Summer 2006, HKUST

Culture: “that’s the way things are done around here.” Put 5 monkeys in a cage and place a banana in the cage. One of the monkeys takes the banana Next, do the same, but when the monkey takes the banana, throw freezing water on all the monkeys Now remove one of the monkeys and replace with a new monkey. Place a banana in the cage. The new monkey will attempt to get the banana, but the other monkeys will attack it to stop it. The new monkey doesn’t understand why, but it doesn’t go for the banana. NO! © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST Again, replace an existing monkey with a new monkey. Repeat the process. The other monkeys, including the monkey that doesn’t know why, will attack the new monkey when it goes to take the banana. Continue the process until none of the original monkeys is left. Even though they don’t know why, they will attack any monkey going for the banana. Why ??? © Emily & Jian, MGTO120 Summer 2006, HKUST

this is what we call Organizational Culture !!! © Emily & Jian, MGTO120 Summer 2006, HKUST

Dimensions of Organizational Culture P A S I Exhibit 3.2 © Emily & Jian, MGTO120 Summer 2006, HKUST

Strong versus Weak Cultures Strong Cultures Are cultures in which key values are deeply held and widely shared. Have a strong influence on how organizational members do things. Why some org. cultures are strong? size, age, founder.... © Emily & Jian, MGTO120 Summer 2006, HKUST

Sources of Organizational Culture The organization’s founder Vision and mission Past practices of the organization The way things have been done The behavior of top management © Emily & Jian, MGTO120 Summer 2006, HKUST

Continuation of the Organizational Culture Recruitment of like-minded employees who “fit” Socialization of new employees to help them adapt to the culture © Emily & Jian, MGTO120 Summer 2006, HKUST

How Employees Learn Culture Stories Narratives of significant events or actions of people that convey the spirit of the organization Rituals Repetitive sequences of activities that express and reinforce the values of the organization Material Symbols Physical assets distinguishing the organization Language Acronyms and jargon of terms, phrases, and word meanings specific to an organization © Emily & Jian, MGTO120 Summer 2006, HKUST

Remember these pictures? © Emily & Jian, MGTO120 Summer 2006, HKUST

Ch.3 organizational culture and the What do you think when you look at this “symbol”?? © Emily & Jian, MGTO120 Summer 2006, HKUST

Do you want a logo for your group? To reflect your distinct culture?? © Emily & Jian, MGTO120 Summer 2006, HKUST

How Culture Affects Leaders establishes appropriate leader behavior constrains decision making in all management functions, P O L C P____ - degree of risk that plans should contain O____ - degree of autonomy given employees L____ - degree of concern for job satisfaction C____ - reliance on external or internal controls © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST A visit to DisneyLand © Emily & Jian, MGTO120 Summer 2006, HKUST

As you watch the video, think about… What is the culture of Disney? Who created this culture? What are some symbols, languages, and rituals that you see in this video? How is the culture of this organization maintained and transmitted? © Emily & Jian, MGTO120 Summer 2006, HKUST

What are Disney’s Core Values? Show business Continuous improvement and innovation Keep the magic and the mystique Make people happy © Emily & Jian, MGTO120 Summer 2006, HKUST

Language Used at Disney “customers” “employees” “at work” “uniform” “on duty” “off duty” Guests/audience cast Play role Costume On stage Off stage © Emily & Jian, MGTO120 Summer 2006, HKUST

How Does Disney Transmit and Maintain its Culture? Using symbols (Mickey), stories, and languages New employee socialization Training, training, and more training!! © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST National Culture Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. May have more influence on an organization than the organization culture. © Emily & Jian, MGTO120 Summer 2006, HKUST

What are Americans, Japanese, and Chinese like? © Emily & Jian, MGTO120 Summer 2006, HKUST

Hofstede’s Framework for Assessing Cultures Individualism versus Collectivism Power Distance Uncertainty Avoidance Quantity versus Quality of Life Long-term versus Short-term Orientation © Emily & Jian, MGTO120 Summer 2006, HKUST

1. Individualism versus Collectivism Individualism - values individual achievement, freedom, and competition. The degree to which people prefer to act as individuals rather than a member of groups. Collectivism - values group harmony, cohesiveness, and consensus. A tight social framework in which people expect others in groups of which they are a part to look after them and protect them. Examples? © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST 2. Power Distance the degree to which a country accepts the fact that differences in its citizens’ physical and intellectual capabilities give rise to inequalities in their well-being. The extent to which a society accepts that power in institutions and organizations is distributed unequally. low power distance: relatively equal distribution high power distance: extremely unequal distribution Examples? © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST 3. Quantity (Achievement orientation) versus Quality (Nurturing) Orientation Quantity or Achievement Orientation valuing assertiveness, performance, success, and competition. The extent to which societal values are characterized by assertiveness, materialism and competition Quality or Nurturing Orientation valuing quality of life, warm personal relationships, and service and care for the weak. (M/F) The extent to which societal values emphasize relationships and concern for others. Examples? © Emily & Jian, MGTO120 Summer 2006, HKUST

4.Uncertainty Avoidance degree of tolerance for uncertainty and willingness to take risks. The extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid them. Examples? © Emily & Jian, MGTO120 Summer 2006, HKUST

5. Long versus Short term orientation Long-Term Orientation – a culture that emphasizes the future, thrift, and persistence. Short-Term Orientation - valuing personal stability and living for the present. Examples? © Emily & Jian, MGTO120 Summer 2006, HKUST

Examples of Hofstede’s Cultural Dimensions (agree? How about HK?) © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST Assertiveness Future Orientation Gender differentiation Uncertainty avoidance Power distance Individual/collectivism In-group collectivism Performance orientation Humane orientation The GLOBE (Global Leadership and Organizational Behavior Effectiveness) Framework for Assessing Cultures © Emily & Jian, MGTO120 Summer 2006, HKUST

video show See the differences? List as many as possible. © Emily & Jian, MGTO120 Summer 2006, HKUST

Where do they come from? How did they come to HK? © Emily & Jian, MGTO120 Summer 2006, HKUST

Doing Business Globally Adopting a Global Perspective Ethnocentric Attitude The parochialistic belief that the best work approaches and practices are those of the home country. Polycentric Attitude The view that the managers in the host country know the best work approaches and practices for running their business. Geocentric Attitude A world-oriented view that focuses on using the best approaches and people from around the globe. © Emily & Jian, MGTO120 Summer 2006, HKUST

Different Types of Global Organizations Multinational Corporation (MNC) A firm which maintains operations in multiple countries but manages the operations from a base in the home country. Transnational Corporation (TNC) A firm that maintains operations in several countries but decentralizes management to the local country. Borderless Organization A firm that has eliminated structural divisions that impose artificial geographic barriers and is organized along business lines. © Emily & Jian, MGTO120 Summer 2006, HKUST

How Do Organizations Go Global © Emily & Jian, MGTO120 Summer 2006, HKUST

© Emily & Jian, MGTO120 Summer 2006, HKUST Homework (remember, this course is to HELP you to think critically, but it is YOU who THINK): Tutorial Think about the national culture differences. Using Hofstede’s and the GLOBE frameworks to analyze the countries you are familiar with. Think about SPECIFIC examples. Describe the cultures of companies you know, using TOPASIA. Search company histories in the website, to see how they went global. © Emily & Jian, MGTO120 Summer 2006, HKUST