1. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.1 Part Two: Understanding Cross-cultural Management CULTURE AND THE ORGANIZATION

2. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.2 CHAPTER 7 CULTURE AND CORPORATE STRUCTURES Part Two: Understanding Cross-cultural Management Concept 7.1: Organizational structures

3. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.3 Organizational structures Organizational structure forms the basis of the organization’s culture: –formalizes the tasks, jobs and positions of its personnel, as well as the limits and responsibilities of the work units –indicates the kind of hierarchy within the organization, the levels of authority and power as well as the formal lines of communication between the employees

4. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.4 Forms of organizational structure Fatehi (1996) puts forward a detailed classification of five organizational structures: Geographic structure Functional structure Product structure Mixed structure (combinations of above) Matrix structure (the two ‘lines’ –functional and project – share responsibility)

5. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.5 Recent forms of organizational structure With globalization, new organizational forms or adaptations to keep pace with economic reality Network structure –a network of company units which has a horizontal system of communication –facilitates cross-cultural transfer of knowledge and organizational learning –Think of the conglomerates/multinationals/companies having this type structure. –Coffee Beans? Visit website..

6. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.6 Recent forms of organizational structure Transnational structure (Bartlett and Ghoshal, 1989) –a multi-faceted organization which can respond to international, multinational and global environment –dispersed, interdependent, and specialized –its national units make differentiated contributions to integrated worldwide operations –its knowledge is developed jointly and shared worldwide. –Examples of transnational companies? GM & Ford (read article-classweb)

7. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.7 Impact of cultural diversity STRUCTURE CULTURAL DIVERSITY Multidomestic : autonomous sub- units situated in several countries.. no impact on the organization International : The culture of the organization considered universal regarded as a source of conflict: it leads to inefficiency Multinational : diversity is inherent through geographical spread can cause problems but can also benefit organization Transnational : generates its own evolution: heterogeneity indispensable. allows mutually beneficial relations to be created

8. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.8 Understanding Cross-cultural Management CHAPTER 7 CULTURE AND CORPORATE STRUCTURES Concept 7.2: Corporate cultures

9. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.9 Corporate culture and management For strategy, culture –is a diagnostic element –acts as a framework of reference for instigating strategy –a framework of reference in human resource management for change policies and the involvement of the people in the process If management is defined as an activity based on three aspects: action, the management of people and the achievement of objectives, to what extent does culture have an impact on management?

10. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.10 Corporate culture and management (Continued) Culture is of interest to management: offers the possibility of increasing efficiency at various levels, finding behaviours which allow the best performance possible allows the manager to explain how the organization works before deciding whether it needs to be changed helps to understand the organization as an entity, as a collection of individuals - can serve as a framework of reference for situations in the future

11. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.11 Corporate culture and management (Continued) Levels of corporate culture Schein (1999) general definition of culture with its three separate layers

12. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.12 Corporate culture and management (Continued) Through a joint learning process, these beliefs and values become tacit assumptions about the nature of the world and how to succeed in it For Schein, cultural assumptions –are to do with internal workings of an organization, AND –how it sees itself in relation to its environment The culture content of the organization must: –survive in the external environment (mission, strategy, structure, processes) –integrate human aspects (common language, relationships) –take account of the national culture in which it is operating

13. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.13 Corporate culture and management (Continued) Corporate values: ‘the basic concepts & beliefs of an organization’ (Deal & Kennedy) form the very basis of corporate culture: give direction and guidelines for day-to-day behaviour lack of concern for these values can undermine leadership and commitment values are an indispensable guide for making day-to- day choices

14. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.14 Corporate culture and management Three characteristics emphasize values and distinguish companies from each other: Organizations have an explicit philosophy as to why they are conducting business. Management is intent on communicating the values which shape the company in terms of the economic choices and its business environment. These values are shared at all levels of the organization, from the shop floor to the board room.

15. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.15 Identifying corporate cultures Deal & Kennedy (2000) present a classification of types of corporate culture using two factors: How much risk is involved in the firm’s activities? How much time is needed before a company and its employees know how successful their decisions or strategies have been (feedback)?

16. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.16 Identifying corporate cultures The Tough Guy, Macho Culture e.g. police, hospitals, cosmetics  lots of risk-taking, quick feedback  emphasis on youth and speed.  quick decisions needed, even if not always right Work Hard / Play Hard Culture e.g. company sales department  ‘Fun’ and action with quick feedback  low-risk activities (strict control system preventing major risks)  consumers very important Bet Your Company Culture e.g. exploration companies (oil)  high risk, slow feedback  years before pay-off or failure.  much discussion to ensure the right decision is taken The Process Culture e.g. banks, insurance, pharmaceutical  low-risk activities with little feedback  focus on how things are done rather than what needs to be achieved

17. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.17 Stereotyping corporate culture Model (Trompenaars & Woolliams, 2003) based on ‘organizational relationships’

18. Browaeys and Price, Understanding Cross-cultural Management, 1 st Edition, © Pearson Education Limited 2009 Slide 7.18 Conclusion The culture of each company remains essentially different Culture is a way a company can differentiate itself from its global competitors If the company has adapted to the demands of its environment, culture remains the most effective way of maintaining a lasting competitive advantage