Transcript CULTURE AND MULTINATIONAL MANAGEMENT

What Is Culture?
• Culture is the pervasive and shared
beliefs, norms, values, and symbols
that guide everyday life
– must be shared by a group of people in
order to exist
– older members of a group try to pass on
to younger (newer) members
– shapes behavior, or structures one’s
perception of the world
– transmitted by symbols, stories and
rituals
– often taken-for-granted
What Is Culture?
  Values tell us what is good,
beautiful, etc.
  Cultural norms prescribe and
proscribe behaviors
  Beliefs represent our
understanding of what is true
Cultural Orientation
Culture  values  attitudes 
behavior  culture
Levels of Culture
Country
Clusters
NATIONAL
CULTURE
BUSINESS
CULTURE
ORGANIZATION
CULTURE
OCCUPATIONAL
CULTURE
MULTINATIONAL
MANAGEMENT
What Is Organizational Culture?
• Edgar Schein says that culture is a
Apattern of basic assumptions that a
given group has invented, discovered, or
developed in learning to cope with 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@
Organizational Subculture
Martin and Siehl (1983)
Enhancing subcultures: are consistent
with and supportive of the dominant
culture
• These subcultures may go unnoticed
because of their value and goal
congruence with the organization=s
culture
• Organizations with only enhancing
subcultures would be relatively
homogenous
Organizational Subculture Cont.
Orthogonal subcultures: have both
similar and differing values to the
organization=s culture
• These subcultures would likely be
identifiable but pose no major
threat to the established
organization leadership
Organizational Subculture Cont.
Counter cultures: are in opposition to the
organization=s culture
• These subcultures would be easily
identifiable, and in some organizations
they may be labeled as problems and in
others opportunities for creating
competitive advantage
• More likely be present in large and
complex organizations
In-class Activity
• Identify five cultural rituals, stories,
or symbols from your native culture.
Two Diagnostic Models to Aid
the Multinational Manager
• Hofstede’s Model of National
Culture
• 7d Cultural Dimensions Model
POWER DISTANCE
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Inequality is good
Everyone has a place
People should depend on a leader
The powerful are entitled to
privileges
• The powerful should not hide their
power
MANAGEMENT
PROCESSES
LOW POWER DISTANCE
HIGH POWER DISTANCE
Management Selection
Educational achievement
Social class; elite
education
Training
For autonomy
For conformity/obedience
Evaluations/Promotion
Performance
Compliance;
trustworthiness
Remuneration
Small wage difference
between management and
worker
Large wage differences
between management and
workers
Leadership Styles
Participative; theory Y
Authoritarian; close
supervision
Motivational Assumptions
People like work; extrinsic
and intrinsic rewards
Assume people dislike
work; Coercion
Decision
Making/Organizational
Design
Decentralized; flat
pyramids; Small proportion
of supervisors
Tall pyramids; large
proportion of supervisors
Human Resources
Management
Strategy Issues
Varied
Crafted to support the
power elite or government
Uncertainty Avoidance
• Avoid conflict
• Low tolerance of deviant people
and ideas
• Respect for laws and rules
• Experts and authorities are usually
correct
• Consensus is important
MANAGEMENT
PROCESSES
Human Resource
Management
HIGH UNCERTAINTY
AVOIDANCE
LOW UNCERTAINTY
AVOIDANCE
Seniority; expected loyalty
Past job performance;
education
Training
Specialized
Training to adapt
Evaluation/Promotion
Seniority; expertise; loyalty
Objective individual
performance data; job
switching for promotions
Remuneration
Based on seniority or
expertise
Based on performance
Leadership Styles
Task oriented
Nondirective; personoriented; flexible
Motivational Assumptions
People seek security; avoid
competition
People self motivated;
competitive
Decision
Making/Organizational
Design
Larger organization; tall
hierarchy; formalized; many
standardized procedures
Smaller organizations; flat
hierarchy; less formalized
with fewer written
rules/standardized
procedures
Strategy Issues
Risk adverse
Risk taking
Management Selection
Individualism
• People are responsible for
themselves
• Individual achievement is ideal
• People are not emotionally
dependent on organizations or
groups
Collectivism
• Self identity based on group
membership
• A belief that group decision making
is best
• A belief that groups protect you in
exchange for loyalty
MANAGEMENT
PROCESSES
LOW INDIVIDUALISM
HIGH INDIVIDUALISM
Human Resources
Management
Management Selection
Group membership; school
or university
Universalistic based on
individual traits
Training
Focus on company based
skills
General skills for
individual achievement
Evaluation/Promotion
Slow with group; seniority
Based on individual
performance
Remuneration
Based on group
membership/organizational
paternalism
Extrinsic rewards (money,
promotion) based on
market value
Leadership Styles
Appeals to duty and
commitment
Individual rewards and
punishments based on
performance
Motivational Assumptions
Moral involvement
Calculative; Individual
cost/benefit
Decision
Making/Organizational
Design
Group; slow; preference
for larger organizations
Individual responsibility;
preference for smaller
organizations
Masculinity
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Clear definitions of gender roles
Men are assertive and dominant
Support for Machismo
Men should be decisive
Work is priority
Growth, success, and money are
important
MANAGEMENT
PROCESSES
LOW MASCULINITY
HIGH MASCULINITY
Human Resources
Management
Management Selection
Independent of gender,
school ties less
important; androgyny
Jobs gender identified; school
performance and ties important
Training
Job-Oriented
Career oriented
Evaluation/Promotion
Job performance with
less gender role
assignments
Continues gender tracking
Remuneration
Less salary differences
between levels; more
time off
More salary preferred to less
hours
Leadership Styles
More theory Y;
More theory X;
Motivational Assumptions
Emphasis on quality of
life, time off, vacations;
work not central
Emphasis on performance and
growth; excelling to be best;
work central to life; job
recognition important
Decision
Making/Organizational
Design
Intuitive/group; smaller
organizations
Decisive/individual; larger
organization preferred
Long Term (Confucian) Orientation
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Belief in substantial savings
Willingness to invest
Acceptance of slow results
Persistence to achieve goals
Sensitivity to social
relationships
• Pragmatic adaptation
MANAGEMENT
PROCESSES
SHORT TERM
ORIENTATION
LONG TERM
ORIENTATION
Management Selection
Objective skill assessment
for immediate use to
company
Fit of personal and
background characteristics
Training
Limited to immediate
company needs
Investment in long term
employment skills
Evaluation/Promotion
Fast; based on skill
contributions
Slow; develop skills and
loyalty
Remuneration
Pay; promotions
Security
Human Resources
Management
Leadership Styles
Use incentives for economic Build social obligations
advancement
Motivational Assumptions
Immediate rewards
necessary
Subordinate immediate
gratification for long term
individual and company
goals
Decision
Making/Organizational
Design
Logical analyses of
problems; design for logic
of company situation
Synthesis to reach
consensus; design for
social relationships
Strategy Issues
Fast; measurable payback
Long term profits and
Group Assignment
For each dimension:
1. Provide a short explanation--define it in your
own words; also, explain the extreme points
(low and high) as well as the mid-point
2. Explain where your country (for the project)
and the U.S. fall on each dimension
3. List 1 or more countries that share each
point: low, high, and middle on each dimension
(see book)
4. Provide management examples for your country
and the U.S. for each dimension--identify
appropriate values and anticipated behaviors
for your country on each dimension—feel free
to compare it to the U.S.
The 7d Model of Culture Cultural
Dimensions and Critical Questions
• Relationships with People:
– universalism vs. particularlism
• Do we consider rules or
relationships more important?
The 7d model, continued
– individualism vs. communitarianism
• Do we act mostly as individuals
or as groups?
– specific vs. diffuse
• How extensively are we involved
with the lives of other people?
The 7d model, continued
– emotional vs. neutral
• Are we free to express our
emotions or are we restrained?
– achievement vs. ascription
• Do we achieve status through
accomplishment or is it part of
our situation in life (e.g.,
gender, age, social class)?
The 7d model, continued
• Perspective on Time:
– sequential vs. synchronic
• Do we do tasks in sequence or
several tasks at once?
• Relationship with the Environment:
– internal vs. external control
• Do we control the environment or
does it control us?
Caveats and Cautions
• Stereotyping
• Ethnocentrism
• Cultural relativism
Conclusions
• Culture has a variety of levels that
affect multinationals
• Models provide starting point to
understand culture
• Learning another culture is a never
ending process