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The Role of CultureThe Role of CultureManaging Across National and Organizational Cultures
Chapters 5 and 6, Hodgetts, Luthans and Doh, International Management: Culture, Strategy and Behavior , 6th edition (New York: McGraw-Hill Irwin, 2006)
Adapted from PowerPoint slides by R. Dennis Middlemist, Professor of Management, Colorado State University
Mark McKennaBUS 162 (6), International and Comparative ManagementSan Jose State University
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OVERVIEWOVERVIEW
1. Applying Hofstede’s Cultural Dimensions
2. Organizational Cultures
3. Multiculturalism
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APPLYING APPLYING HOFSTEDE’S HOFSTEDE’S CULTURAL CULTURAL DIMENSIONSDIMENSIONS1. Cross-Cultural Differences
and Similarities
2. Six Basic Cultural Variations
3. Exercise: A Jumping Off Place
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Differences and Differences and SimilaritiesSimilaritiesChallenges for effective cross-cultural
management◦ Parochialism: the tendency to view the world
through one’s own eyes and perspective◦ Simplification: the process of exhibiting the
same orientation toward different cultural groups
Similarities across cultures◦ In US and Russian firms organizational
behavior modifications led to performance improvements
◦ Antecedents of organizational commitment were similar in US and Korea firms
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Differences and Differences and SimilaritiesSimilaritiesDifferences across cultures
◦ In the criteria used in evaluating personnelNetherlands France Germany Britain
RealityAnalysisHelicopterLeadershipImagination
ImaginationAnalysisLeadershipHelicopterReality
LeadershipAnalysisRealityImaginationHelicopter
HelicopterImaginationRealityAnalysisLeadership
◦ In the norms and rules regulating wages, compensation, pay equity, and maternity leave
◦ In labor relations, job design, and the design of employee training programs
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Basic Cultural VariationsBasic Cultural Variations1) What is the nature of people?2) What is the person’s relationship to
nature?3) What is the person’s relationship to
other people?4) What is the modality of human
activity?5) What is the temporal focus of human
activity?6) What is the conception of space?
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A Jumping Off PlaceA Jumping Off PlaceA successful, mid-sized Ohio-based US
manufacturing firm decides to open a plan near Madrid, Spain.
Factors in the decision include:◦ The end of its licensing agreement with a
German firm◦ New patents and technology◦ Lower labor costs in Spain
The Spanish partner will provide on-site support; the US firm will provide capital, technology and training
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A Jumping Off PlaceA Jumping Off PlaceIf the venture in Spain is successful, the
US manufacturer plans to use this experience to open plants first in Italy, then in France
Put yourself in the position of an international consultant or manager◦ What differences would you anticipate
between Spain and the US?◦ How might lessons learned in Spain need to
be adapted for operations in Italy?◦ How would France differ from both, and
from the U.S.?
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Figure 4-5: A Power-Distance Figure 4-5: A Power-Distance and Individualism-Collectivismand Individualism-Collectivism
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Figure 4-6: A Power-Distance Figure 4-6: A Power-Distance and Uncertainty-Avoidanceand Uncertainty-Avoidance
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Figure 4-7: A Masculinity-Figure 4-7: A Masculinity-Femininity and Uncertainty-Femininity and Uncertainty-AvoidanceAvoidance
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A Jumping Off PlaceA Jumping Off PlacePower
Distance
Indivi-dualism
Uncertainty
Avoidance
Masculinity
USALow(40)
High(91)
Low(46)
Mid(62)
SpainMid(57)
Low(51)
High(86)
Low(42)
Italy Low(50)
High(76)
High(75)
Mid(70)
France Mid(68)
Mid(71)
High(86)
Low(43)
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Caveats and an ObservationCaveats and an ObservationCaveats…
◦ What is typical?◦ How discrete are subcultures?◦ Are values and beliefs fixed or fluid?◦ What are the significant “dimensions”?◦ Are attributes generalizable or situation
specific?Observation…
◦ “Understanding the properties and prospects of nations requires openness to the richness and diversity of national practices and institutions” (Brendan McSweeney, http://geert-hofstede.international-business-center.com/mcsweeney.shtml)
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ORGANIZATIONAL ORGANIZATIONAL CULTURESCULTURES
1. Definition
2. Interactions between National and Organizational Cultures
3. Strategic Predispositions of International Organizations
4. A Typology of Organizational Cultures
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DefinitionsDefinitionsHodgetts, Luthans and Doh (p. 154)
◦ “shared values and beliefs that enable members to understand their roles and the norms of the organization.”
Edgar Schein (1997, p. 12)◦ “a pattern of shared basic assumptions that
the group learned as it solved its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.”
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InteractionsInteractionsThe values and beliefs employees
bring to the workplace affect their behavior within the workplace
Working for MNC may accentuate rather than moderate or erase cultural differences
Cultural differences across subsidiaries often cause coordination problems
Important dimensions of cultural difference within organizations include: motivation, relationship, identity, communication, control, and conduct
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European’s Perceptions of Cultural European’s Perceptions of Cultural Dimensions of U.S. Operations/Same Dimensions of U.S. Operations/Same MNCMNC
Activities
Job
Corporate
Open
Tight
Conventional
Outputs
Person
Professional
Closed
Loose
Pragmatic
30 31 32 33 34 35 36 37 38 39 40 41 42
Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and European Operations (B) of the Same MNC
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European’s Perceptions of Cultural European’s Perceptions of Cultural Dimensions of European Operations/Same Dimensions of European Operations/Same MNCMNC
Activities
Job
Corporate
Open
Tight
Conventional
Outputs
Person
Professional
Closed
Loose
Pragmatic
30 31 32 33 34 35 36 37 38 39 40 41 42
Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and European Operations (B) of the Same MNC
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STRATEGIC STRATEGIC PREDISPOSITIONSPREDISPOSITIONS
1. Ethnocentric
2. Polycentric
3. Regiocentric
4. Geocentric
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Strategic PredispositionsStrategic Predispositions
Ethnocentric predisposition◦ A nationalistic philosophy of
management whereby the values and interests of the parent company guide strategic decisions.
Philosophies of Management
Ethnocentric predisposition
Ethnocentric predisposition
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Strategic PredispositionsStrategic Predispositions Polycentric predisposition
◦ A philosophy of management whereby strategic decisions are tailored to suit the cultures of the countries where the MNC operates.
Philosophies of Management
Ethnocentric predisposition
Ethnocentric predisposition
Polycentric predisposition
Polycentric predisposition
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Strategic PredispositionsStrategic Predispositions Regiocentric predisposition
◦ A philosophy of management whereby the firm tries to blend its own interests with those of its subsidiaries on a regional basis.
Philosophies of Management
Ethnocentric predisposition
Ethnocentric predisposition
Polycentric predisposition
Polycentric predisposition
Regiocentric predisposition
Regiocentric predisposition
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Strategic PredispositionsStrategic Predispositions Geocentric predisposition
◦ A philosophy of management whereby the company tries to integrate a global systems approach to decision making.
Philosophies of Management
Ethnocentric predisposition
Ethnocentric predisposition
Polycentric predisposition
Polycentric predisposition
Regiocentric predisposition
Regiocentric predisposition
Geocentric predisposition
Geocentric predisposition
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Typology of Organizational Typology of Organizational CulturesCultures
Adapted from Figure 6–2: Organizational Cultures
Person Emphasis
Task Emphasis
Equity
Hierarchy
Fullfillment-oriented culture
INCUBATOR
Project-oriented culture
GUIDED MISSILE
EIFFEL TOWER
Role-oriented culture
FAMILY
Power-oriented culture
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Typology of Organizational Typology of Organizational CulturesCultures
Family culture ◦ Power oriented and headed by a leader
who is regarded as a caring parent◦ Management looks after employees,
ensures they are well-treated◦ May promote loyalty and commitment or
lead to support for an ineffective leaderEiffel tower culture
◦ Jobs are well defined◦ Everything is coordinated from the top◦ Relationships are specific and job-related◦ Status remains with the job
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Typology of Organizational Typology of Organizational CulturesCultures
Guided missile culture ◦ Work is typically undertaken by teams or
project groups◦ Individual expertise is more important than
formal hierarchies◦ Team members are interdependent and (at
least potentially) equalIncubator culture
◦ Organizations as incubators for self-expression and self-fulfillment
◦ Little formal structure◦ Focus is on development of an innovative
product or service
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MULTICULTURALISMULTICULTURALISMM1. The Evolution of
International Corporations
2. Problems and Advantages of Diversity
3. Putting It All Together
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The Evolution of The Evolution of International CorporationsInternational Corporations
Phase1
Domestic firms
Phase2
International firms
Phase3
Multinational firms
Phase4
Global firms
Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), p. 123.
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Phases of MulticulturalismPhases of MulticulturalismDomestic firms
◦ Focus on delivering a product or service in a domestic market
◦ Ethnocentric perspective – “one good way”◦ Multicultural challenge is to manage intra-
national cultural diversityInternational firms
◦ Multidomestic market-oriented strategy◦ Polycentric or regiocentric perspective –
“many good ways”◦ Multicultural challenge is to manage cross-
cultural relationships with clients and employees
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Phases of MulticulturalismPhases of MulticulturalismMultinational firms
◦ Focus is on lower costs and increasing efficiency
◦ Multinational perspective – “one least-cost way”
◦ Multicultural challenge is to manage intra-organizational cultural diversity
Global firms◦ Global dominance through mass
customization◦ Geo/multicentric perspective – “many good
ways”◦ Multicultural challenge is to manage both
internal and external diversity
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Problems and AdvantagesProblems and AdvantagesProblems associated with diversity
◦ Lack of group cohesion◦ Mistrust of others◦ Erroneous or biased perceptions◦ Miscommunication
Advantages of diversity◦ Enhanced creativity◦ Better decision making; preventing
groupthink◦ More effective and productive performance
Cross-cultural groups are better at innovation; single culture groups are more effective performing routine tasks
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Putting It All TogetherPutting It All Together
Complexity in organizational culture◦ Interface between national and
organizational culture◦ Types of organizational culture◦ Degree of multiculturalism
Implications for managers◦ National cultural values
Impact on employee behavior Are not easily changed
◦ Particularly important when considering The management of human resources Mergers and acquisitions