Management and Culture

Hofstede Defined Culture as • Culture is collective programming of human mind that distinguishes members of one human group from those of another. • Culture in this sense is a system of collectively held values 1

Management and Culture

• Hofstede’s four dimension of culture:

Power Distance

• This dimension relates to degree of equality /inequality between people in particular society.

Individualism

• This dimension focuses on degree to which a society reinforces individual or collective achievement and interpersonal relationships. 2

Management and Culture

Hofstede’s four dimension of culture….continued

Uncertainty Avoidance

• This dimension concerns level of acceptance for uncertainty and ambiguity within society.

Masculinity

• This dimension pertains to degree societies reinforce, or do not reinforce, traditional masculine work role model of male achievement, control, and power. 3

Management and Culture

Significance of Organizational Culture Study • Though the study of organizational culture is not a new topic, its importance and significant contribution in fierce competitive market economy is still contemporary. • Potential paradigms and implications of organizational culture and its plausible contribution in organization to gain competence are interesting subjects to practitioners and academicians. 4

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Management and Culture

Organizational Culture: Definition

When culture is described by organizational researchers, organizational culture is perceived as management centric and as characteristics of organizations of ethnic groups.  We can define organizational culture as values, beliefs, and shared understanding in organizations used and organized in order to promote performance. • …a collective understanding, a shared and integrated set or perceptions, memories, values and attitudes that have been learned over time and which determine expectations of behavior that are taught to new members in their socialization into organization.

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Management and Culture

Organizational Culture: Definition.. continued

• It is the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members • In other words, organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations.

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Management and Culture

• To understand organizational culture comprehensively, it is to be studied from different levels, individual, group, and organization as a whole.

• Impact of culture

Culture gives identity, provides collective commitment, builds social system stability and allows people to make sense of the organization (Sannwald, 2000) 7

Management and Culture

Primary Characteristics of Organizational Culture Innovation and risk taking:

Some organizations are very innovative like Apple, Sony and management asked employees to take risk like Wal-Mart

Attention to detail:

Some organizations go for in detail analysis of products, service, performance, relationships in both internal and external affairs

Outcome orientation:

Some organizations focus on final outcome or results rather than on techniques or processes to achieve those outcomes in both internal and external affairs like East India company or some garments company in Bangladesh.

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Management and Culture

Primary Characteristics of Organizational Culture ..continued

People orientation:

Some organizations deal any situation considering the effects of outcomes on people within the organization. Suppose some organizations are always concerned and take proper care of their employees at any situations.

Team orientation:

Some organizations promote any tasks in group rather than individually and evaluate performance as group behavior 9

Management and Culture

Primary Characteristics of Organizational Culture ..continued

Aggressiveness:

In some organizations people are very aggressive and competitive rather than easy going

Stability:

Some organizations maintain consistency in their style in all aspects with growth 10

Management and Culture

Culture’s Function Culture performs a number of functions within an organization.  It has a boundary-defining role; creates distinctions between one organization and others  Conveys sense of identity for organization members.

 Culture facilitates generation of commitment to something larger than individual self interest.

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Management and Culture

Culture’s Function .. continued  Integrates organizational mission, vision, objective, social values, socio-cultural systems, management policy, employee traits (from individual level), and controlling values, like technology and economics.

 Enhances stability of social system. Culture is social glue that helps hold organization 12

Management and Culture

• Culture influences business negotiation, conflict resolution, mergers & acquisition, organization policy.

• On the other hand, culture affects purchase decision, product choice, and customers’ evaluation of complex services. 13

Management and Culture

• Due to different culture, organizations of different countries differ in management process. • Ethnocentrism: this term in culture often conveys the belief that one's own race, ethnic group, and overall culture is the most important and superior to those of other groups. 14

Management and Culture •

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Contingency Theory of Management

Assumes there is no one best way to manage.

– The environment impacts the organization and managers must be flexible to react to environmental changes.

– The way the organization is designed, control systems selected, depend on the environment.

Technological environments change rapidly, so must managers.

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Management and Culture •

Thirty or even twenty years ago, the existence of a relationship between management and national cultures was far from obvious to many, and it may not be obvious to everyone even now.

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In the 1950s and 60s, the dominant belief, at least in Europe and the U.S., was that management was something universal. There were principles of sound management, which existed regardless of national environments.

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If national or local practice deviated from these principles, it was time to change local practice.

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Management and Culture

Nationality is important to management for at least 3 reasons

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First is political . Nations are political units with own institutions: forms of government, legal, educational, labor and employer's association systems.

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Management and Culture –

In USA employers enjoy freedom but in North Korea, government has strong hold on the business organizations

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In USA laws and political system are stable, so companies can predict business future accurately but this is certainly not true for so many developing countries

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• Management and Culture

For example, formal law in France protects the rights of the individual against the state much better than formal law in Great Britain or Holland.

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However, few French citizens have ever won court cases against the state, whereas this happens quite regularly in Holland or Britain.

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Such informal political realities are quite resistant to change.

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Not only do the formal institutions differ, but even if we could equalize them, the informal ways of using them differ.

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Management and Culture • • •

Second reason why nationality important is sociological.

Nationality or rationality (social values and norms) has a symbolic value to citizens. We derive part of our identity from it; it is part of the 'who I am." Symbolic value of belonging to a nation or region has been and still is sufficient reason for people to go to war, when they feel their common identity to be threatened.

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Management and Culture •

National and regional differences are felt by people to be a reality-and therefore they are a reality.

• In USA, you do not need to show any formal respect to your seniors but according to our culture you have to show respect to your senior bosses 21

Management and Culture • • • •

The third reason why nationality is important is psychological. Our thinking is partly conditioned by national culture factors.

Effect of early life experiences in family and later educational experiences in schools and organizations, which are not same across national borders.

In USA you cannot ask so many private questions to your employees but in our management system we ask.

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Management and Culture •

Examples of differences in mental programming between members of different nations can be observed all around us.

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One source of difference is, of course, language and all that comes with it, but there is much more.

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Management and Culture •

In Europe, British people will form a neat queue whenever they have to wait; not so, the French.

Dutch people will as a rule greet strangers when they enter a small, closed space like a rail-way compartment, doctor's waiting room, or lift; Belgians. not so, the

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Austrians will wait at a red pedestrian traffic light even when there is no traffic; not so the Dutch.

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Management and Culture •

Swiss tend to become very angry when somebody-say, a foreigner-makes a mistake in traffic; not so the Swedes.

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All these are part of an invisible set of mental programs which belongs to these countries' national cultures. Such cultural programs are difficult to change, unless one detaches the individual from his or her culture.

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Management and Culture •

Within a nation or a part of it, culture changes only slowly.

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What is in minds of people has become crystallized in institutions mentioned earlier: government, legal systems, educational systems, industrial relations systems, family structures, religious organizations, sports clubs, settlement patterns, literature, architecture, and even scientific theories.

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Management and Culture • Naive assumption that management is same or is becoming same around world is not tenable in view of these demonstrated differences in national cultures. • Nature of management skills is such that they are culturally specific.

• A management technique or philosophy that is appropriate in one national culture is not necessarily appropriate in another.

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Management and Culture • • • •

We find the U.S. in an extreme position on the Individualism scale (50 out of 50) and just below average on the Power Distance scale (16 out of 50). What does the high Individualism score mean? U.S. leadership theories are about leading individuals based on the presumed needs of individuals who seek their ultimate self interest. For example, the word "duty," which implies obligations towards others or towards society, does not appear at all in the U.S. leadership theories.

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Management and Culture • • Geert Hofstede remarked that

Professor James Stevens once gave the same description of an organizational problem to separate groups of French, German , and British management students. Problem described a conflict between 2 departments. Students were asked to determine what was wrong and what should be done to resolve the problem.

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Management and Culture •

French in majority referred problem to next higher authority level.

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Germans suggested setting of rules to resolve such problems in future.

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British wanted to improve communication between the 2 department heads, perhaps by some kind of human relations training.

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Management and Culture

• Stevens

concluded that dominant underlying model of organization for French was a pyramid , a hierarchical structure held together by the unity of command (larger Power Distance) as well as by rules (strong Uncertainty Avoidance).

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Government rules intervene in industrial management.

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Managers are mostly from elite universities.

Intellectual ability (problem solving and numerical analysis) rather than action.

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Written communication rather than oral

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Management and Culture •

Model for Germans was a well-oiled machine ; exercise of personal command was largely unnecessary because rules settled everything (strong Uncertainty Avoidance, but smaller Power Distance).

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Germans are authoritarian.

Reliance on authority in directing work force

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Subordinates are obedient. Managerial decisions must be obeyed

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Always follow leader

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Management and Culture •

Model for British was a village market : no decisive hierarchy, flexible rules, and a resolution of problems by negotiating (small Power Distance and weak Uncertainty Avoidance).

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Logical behavior is important.

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Job security is emphasized.

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Individualism is highly valued

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Management and Culture • • Hofstede told that a

discussion with an Indian colleague led me to believe that underlying model of an organization for Indians is family: undisputed personal authority of father-leader but few formal rules (large Power Distance and weak Uncertainty Avoidance). This should also apply in the Chinese culture city-states of Hong Kong and Singapore.

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Management and Culture

• Japanese managers emphasize group harmony and cohesion, consensus decision making, and life time employment.

• Korean managers emphasize harmony but not group values. They maintain hierarchy, family member employment, top down leadership and autocracy.

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Management and Culture

What is Bangladeshi Management?

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