Culture and Organisation in a Multinational Firm

Structure of the presentation

• Meaning of culture

• Cultrural dimensions-national culture

*Trompenaars and Hofstede

-organizational culture

• Case study

What’s culture?

• A shared system of meanings

• About groups-not about individual behavior

• Learned-not inherited

• Transgenerational

• Patterned

• Not “wright” or “wrong”

The Meaning of Culture• A Model of Culture

The Meaning of Culture

How Americans see the French• arrogant•flamboyant•hierarchical•emotional

How French see Americans• naive

•aggressive•unprincipled

•workaholic

STEREOTYPES STEREOTYPES

French Culture U.S. Culture

• Culture as a Normal Distribution

Is their one best way of managing and organising?

• No! Why?

• Each culture has different meanings

• One fact can have different meanings in different cultures

• Example : the walkman

• Hofstede and Trompenaars

Cultural differences : Trompenaars

• Universalism-particularism

• Individualism-communitarianisme

• Neutral-emotional

• Specific-diffuse

• Achievement-ascription

• Sequential-synchronic

• Inner-directed and outer-directed

1. Universalism-Particularism

Universalism

• Consistency• Standards and rules• Clarity• Uniform procedures

Particularism

• Flexibility• It depends on the

circumstance• Make exeptions• At ease with

ambiguity

• A Car Accident

What right has your friend?

A. My friend has a definite right as a friend to expect me to testify to the lower figure.

B. He has some right as a friend to expect me to testify to the lower figure.

C. He has no right as a friend to expect me to testify to the lower figure.

1. Universalism-Particularism

Friend has some/no right and would not help

97%

93%

93%

92%

91%

91%

90%

87%

83%

73%

69%

68%

54%

47%

44%

37%

32%

0% 20% 40% 60% 80% 100% 120%

Switzerland

Canada

USA

Sweden

United Kingdom

Australia

Netherlands

Germany

Czech Rep

France

Singapore

J apan

India

China

Russia

Korea

Venezuela

2. Individualism-Communitarianism

Individualism

• I• Achieving alone• Ex.Vacations taken in

pairs, even alone

Communitarianism

• We (part of a group)• Decisions taken in

group• Ex.Vacations in group

Percentage opting for Individual Freedom

89%

71%

69%

67%

65%

64%

61%

60%

53%

52%

44%

41%

41%

39%

37%

32%

30%

0% 20% 40% 60% 80% 100% 120%

Israel

Canada

USA

Denmark

Netherlands

Finland

UK

Russia

Germany

Italy

Indonesia

China

France

J apan

India

Mexico

Egypt

3. Neutral-Affective

Neutral

• Do not reveal what they are, thinking or feeling

• Cool• Seem monotone• Physical contact =

taboo

Affective

• Reveal thoughts and feelings

• Emotional• Heated, vital and

animated• Seem dramatical

Percentage not expressing emotions overtly

81%74%

59%

55%51%

47%

46%45%

43%

40%

33%30%

28%

24%19%

18%

15%

0% 20% 40% 60% 80% 100% 120%

Ethiopa

J apan

Austria

China

India

Portugal

Sweden

UK

USA

Brasil

Italy

France

Argentina

Russia

Spain

Egypt

Kuwait

4. Specific-Diffuse

Specific• Principles and

behaviour independent of the person being addressed

• Work and life are separated

• Direct, to the point, purposeful in relating

Diffuse• Everything depends of

the context and the person

• Work and private life are often very close

• Indirect, seemingly aimless forms of relating

Specific culture

Work

Sport

Diffuse Culture

A Boss asking to paint the house

• The colleague arguesYou don’t have to paint the house if you don’t feel

like it. He is your boss in the company.Ouside the company, he has little authority.

• The subordinate argues:Despite the fact that I don’t feel like it, I will paint

the house anyway. He is my boss and you cannot ignore it outside your work either.

Would not paint the house

91%

91%

89%

88%

87%

82%

78%

70%

69%

67%

66%

65%

58%

52%

47%

46%

32%

0% 20% 40% 60% 80% 100% 120%

Sweden

Netherlands

Denmark

UK

Canada

USA

Australia

Mexico

Thailand

Greece

Belgium

Austria

Singapore

Venezuela

Kuwait

Nigeria

China

5. Achievement-Ascription

STATUS?

What you do Who you are

5. Achievement-Ascription

Achievement• Competence

determines status• Respect is based on

achieving your job• Senior managers are of

varying age

Ascription

• Extensive use of titles(who you are)

• Respect is gained through your status (background)

• Senior manager is mostly male, middle-aged and qualified by his background

Percentage not agreeing with acting as really suits you even if you don't get things done.

75%

65%

56%

54%

49%

40%

34%

33%

32%

31%

30%

28%

26%

25%

20%

13%

12%

4%

0% 20% 40% 60% 80% 100% 120%

USA

Canada

UK

Sweden

Denmark

Germany

Switzerland

France

Honk Kong

Mexico

Russia

China

J apan

Austria

Korea

Czech rep

Argentina

Egypt

6. Sequential-Synchronic

Sequential• One activity at the

time• Relationships are

subordinate to the schedule

• Preference to follow initial plans

• Time is measurable

Synchronic• More activities at the

time• Schedules are

subordinate to the relationship

• Follow where relationships lead

• Time is like a wide ribbon

7. Inner-directed VS outer-directed

Inner-directed

• I am in control• Dominating attitude• Discomfort when the

environment seems out of control

Outer-directed

• Environment is in control

• Flexible attitude, willing to compromise

• Comfort with waves,cycles if these are natural

What happens to me is my own doing

88%

86%

82%

77%

76%

75%

75%

72%

72%

66%

63%

63%

59%

57%

49%

39%

33%

0% 20% 40% 60% 80% 100% 120%

Israel

Norway

USA

UK

France

Austria

Belgium

Italy

Korea

Germany

J apan

India

Czech rep

Singapore

Russia

China

Venezuela

Cultural differences : Geert Hofstede

• Power distance

• Uncertainty avoidance

• Individualism

• mascunility

1. Power distance the extent to which power is accepted

High power distance

• Obey blindly• Steep structure• Centralized• A lot of supervisory

personnel

Low power distance

• Flat structure• Decentralized• Less supervisory

personnel

2 Uncertainty avoidance

High avoidance

• High need for security• Strong belief in experts• Important structures• More written rules• Lower labor turnover• Example: Germany Japan

Low avoidance

• Accepting risk

• Life must go on Less structural

• Fewer written rules

• Higher labor turnover

• Example:Great-Britain

Denmark

3. Individualism-Collectivism

Individualism

• I

• Greater individual initiative

Collectivism

• Belonging to a group

• Less individual initiative

4. Masculinity

Masculinity

• = dominant values are success,money and things

• Earnings, recognition and achievement is important

• Independent decision makers

Femininity• = dominant values are

caring for others and the quality of life

• Cooperation• Friendly atmosphere• Employment security• Group decision

makers

Organizational culture

• Definition of organizational culture

• Characteristics

• The interaction with national culture

• Four categories for organizational culture

1/ Definition

• Assumptions that are developed by a group through her existence

• New members should adopt this way of thinking in order to fit with the organisation

• The organizational culture of a MNC can differ a lot from one country to an other

2/Characteristics of Organizational Culture

OrganizationalCulture

Observedbehavioralregularities

Norms

Philosophyon treatment of employees/

customers

Rules ofemployeebehavior

Organizationalclimate

Dominantvalues

3/ Interaction between national and organizational culture

• National cultural values are significant

• The values people bring to work can’t be changed easily

EIFFEL TOWERRule-oriented

culture

Fulfillment-orientedculture

INCUBATOR

FAMILYPower-oriented

culture

Project-orientedculture

GUIDED MISSILE

Equity

Hierarchy

TaskEmphasis

PersonEmphasis

4/Four categories

EIFFEL TOWERRule-oriented

culture

Fulfillment-orientedculture

INCUBATOR

FAMILYPower-oriented

culture

Project-orientedculture

GUIDED MISSILE

Equity

Hierarchy

TaskEmphasis

PersonEmphasis

4/Family Culture

4/ Family culture

• Power-oriented culture• Diffuse relationships• Status is ascribed (parent figures)• Intuitive and error-correcting way of thinking• People are seen like family members• Father makes the changes• Management by subjectives• In conflict: do not lose your power

EIFFEL TOWERRule-oriented

culture

Fulfillment-orientedculture

INCUBATOR

FAMILYPower-oriented

culture

Project-orientedculture

GUIDED MISSILE

Equity

Hierarchy

TaskEmphasis

PersonEmphasis

4/Eiffel tower culture

4/ eiffel tower culture

• Role-oriented culture• Specific relationships• Status is ascribed to superior roles• Rationally thinking• People are seen like human ressources• Change through rules and procedures• Management by job description• Criticism is accusation of irrationalism• Everything is planned, structured

EIFFEL TOWERRule-oriented

culture

Fulfillment-orientedculture

INCUBATOR

FAMILYPower-oriented

culture

Project-orientedculture

GUIDED MISSILE

Equity

Hierarchy

TaskEmphasis

PersonEmphasis

4/Guided missile culture

4/ Guided missile culture

• Project-oriented culture

• Egalitarian and task-oriented

• Specific relationships

• Problem centered way of thinking

• People are seen as experts

• Management by objectives

EIFFEL TOWERRule-oriented

culture

Fulfillment-orientedculture

INCUBATOR

FAMILYPower-oriented

culture

Project-orientedculture

GUIDED MISSILE

Equity

Hierarchy

TaskEmphasis

PersonEmphasis

4/Incubator culture

4/ Incubator culture

• Self-fulfilment oriented culture

• No structure

• Diffuse relationships

• Thinking is process-oriented and creative

• People are seen as co-creators

• Change is improvised

• Management by enthusiasm

Person Task

Hierarchical

Egalitarian

•Den

•Fra

•UK•Irland

•Bel

•Ger

•Kor

•Norway

•Spain

•USA•Sweden

•Ita

Managing Cultural Differences

RecognitionIncrease awareness of

one’s own cultural perception

RespectAppreciate cultural

differences

ReconciliationResolve cultural differences

Time

Process

CASE Cultural Transformation at NUMMI

NUMMI

• Joint venture between Generals Motors and Toyota

• US and Japanese culture needed mixed up

• In order to get success, some differences needed to be reconciliated

Cultural Reconciliation

Universalist Particularist

•Obligation to report problems in order to improve system

•Differences of opinion are accepted and valued

•Flexibility of work rules

•Tolerant atmosphere

Cultural Reconciliation

Individualist Communitarist

•Employment security

•Participative decision making

•Plant collective discipline

•Managers closer to employees in order to give them support

•Creation of open offices, communal cafetaria

•Flat wage structure

Cultural Reconciliation

Specific Diffuse

•More than a workplace

•Focus on quality and process rather than quantity

•Building-trust first in order to achieve results

Cultural Reconciliation

Achievement Ascription

•Past achievement has no importance

•More respect for the status of the superior

Cultural Reconciliation

Sequential Synchronous

•Transfer of the « just-in time » japanese type of managment

•« Pull » instead of « Push »,

•Synchronisation instead of sequence

Cultural Reconciliation

Inner-directed Outer-directed

•Flexibility

•Looking for the problem instead of someone responsible

Cultural Reconciliation

Low uncertainty avoidance

High uncertainty avoidance

•No lay-off

•Job security

•More flows of information

Cultural Reconciliation

Low power distance

High power distance

•More respect for authority

NUMMI:Conclusion

• Alone, Americans are much stronger than Japanese

• In group the Japanese are much stronger than the Americans

• Mix of two cultures can be beneficial for everybody

• If you join two cultures and you can capture the positive points of both, you can get extraordinary results