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Organizational culture & Diversity
The Nature of Organizational Culture
Shared values and beliefs that enable members to understand their
roles and the norms of the organization, including
Observed behavioral regularities, as typified by common language,
terminology, and rituals.
Norms, as reflected by things such as the amount of work to be done
and the degree of cooperation between management and employees.
Dominant values that the organization advocates and expects
participants to share, such as high product and service quality, low
absenteeism, and high efficiency.
Interaction Between National and Organizational Cultures
National cultural values of employees may have a significant
impact on their organizational performance
Cultural values employees bring to the workplace with them
are not easily changed by the organization
Organizational Cultures in MNCs
There are four steps in the integration of organizational cultures in international expansions that result from mergers or acquisition1. The two groups have to establish the purpose, goal, and focus of their
merger2. They have to develop mechanisms to identify the most important
organizational structures and management roles3. They have to determine who has authority over the resources needed
for getting things done4. They have to identify the expectations of all involved parties and
facilitate communication between both departments and individuals in the structure
Organizational Cultures in MNCs
Three aspects of organizational functioning that are important in determining MNC organizational culture
1. The general relationship between the employees and their organization
2. The hierarchical system of authority that defines the roles of managers and subordinates
3. The general views that employees hold about the MNC’s purpose, destiny, goals, and their places in them.
Organizational Cultures in MNCs
Person Emphasis
Task Emphasis
Equity
Hierarchy
Fullfillment-oriented culture
INCUBATOR
Project-oriented culture
GUIDED MISSILE
EIFFEL TOWER
Role-oriented culture
FAMILY
Power-oriented culture
Organizational Cultures in MNCs
Family culture
Strong emphasis on hierarchy and orientation to the
person
Family-type environment that is power oriented and
headed by a leader who is regarded as a caring parent
FAMILY
Power-oriented culture
Management looks after employees, and tries to ensure that they are
treated well and have continued employment
May catalyze and multiply the energies of the personnel or end up
supporting a leader who is ineffective and drains their energies and
loyalties
Organizational Cultures in MNCs
Eiffel Tower
Strong emphasis on hierarchy and orientation to the task
Jobs are well defined, and everything is coordinated from the top
This culture is narrow at the top, and broad at the base
Relationships are specific, and status remains with the job. Managers seldom create off-the-job relationships with their
people, because they believe this could affect their rational judgment
This culture operates very much like a formal hierarchy—impersonal and efficient and loyalties
EIFFEL TOWER
Role-oriented culture
Organizational Cultures in MNCs Guided missile
Strong emphasis on equality in the workplace and orientation to the task
This culture is oriented to work Work typically is undertaken by teams or project groups
In projects, formal hierarchical considerations are given low priority, and individual expertise is of greatest importance
All team members are equal (or at least potentially equal All teams treat each other with respect, because they may need
the other for assistance Egalitarian and task-driven organizational culture
Project-oriented culture
GUIDED MISSILE
Organizational Cultures in MNCs
Incubator
Strong emphasis on equality and personaI orientation
Based on the premise that organizations serve as incubators for the self-expression and self-fulfillment of their members Little formal structure
Participants in an incubator culture are there primarily to perform roles such as confirming, criticizing, developing, finding resources for, or helping to complete the development of an innovative product or service
Fullfillment-oriented culture
INCUBATOR
Table 6–3Summary Characteristics of the Four Corporate Culture
Relationshipsbetween employees
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Four Corporate Cultures
Diffuse relation-ships to organic whole to which one is bonded
Specific role inmechanical system ofrequired interaction
Specific tasks in cybernetic system targeted on shared objectives
Diffuse, spontaneous relationships growing out of shared creative process
Attitude towardauthority
Status is ascribed to parent figures who are close and powerful
Status is ascribed to superior roles that are distant yet powerful
Status is achieved by project group members who contribute to targeted goal
Status is achieved by Individuals Exemplifying creativity and growth
Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator
Ways of thinking and learning
Intuitive, holistic, lateral and error correcting
Logical, analytical, vertical, and rationally efficient
Problem centered, professional, practical, cross disciplinary
Process oriented, creative, ad hoc, inspirational
Table 6–3Summary Characteristics of the Four Corporate Culture
Attitudes toward people
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Four Corporate Cultures
Family members Human resources Specialists and experts
Co-creators
Ways of changing “Father” changes Course
Change rules and procedures
Shift aim as target moves
Improvise and attune
Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator
Ways of motivating and rewarding
Intrinsic satisfaction in being loved and respected
Promotion to greater position, larger role
Pay or credit for performance and problems solved
Participation in the process of creating new realities
Management by subjectives
Management by job description
Management by objectives
Management by enthusiasm
Table 6–3Summary Characteristics of the Four Corporate Culture
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Four Corporate Cultures
Corporate CultureCharacteristic Family Eiffel Tower Guided Missile IncubatorCriticism and conflict resolution
Turn other cheek, save other’s face, do not lose power game
Criticism is accusation of irrationalism unless there are procedures to arbitrate conflicts
Constructive task related only, then admit error and correct fast
Improve creative idea, not negate it
Source: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business, 2nd ed. (Burr Ridge, IL: Irwin, 1998), p. 183.
International Culture Diversity Focus
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.
Table 6–4The Evolution of International Corporations
Primary Product/service Market Price Strategy orientation
Competitive Domestic Multidomestic Multinational Global strategy
Importance of Marginal Important Extremely Dominant world business important
Product/service New, unique More Completely Mass-customized standardized standardized
(commodity)
Product Process Engineering not Product and engineering engineering emphasized process emphasizedemphasized engineering
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
Adapted from Table 6–4: The Evolution of International Corporations
Table 6–4The Evolution of International Corporations
Technology Proprietary Shared Widely shared Instantly and extensively shared
R&D/sales High Decreasing Very low Very high
Profit margin High Decreasing Very low High, yet immediately
decreasing
Competitors None Few Many Significant (few or many)
Market Small, domestic Large, Larger, Largest, global multidomestic multinational
Production Domestic Domestic and Multinational, Imports and location primary markets least cost exports
Adapted from Table 6–4: The Evolution of International Corporations
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
Table 6–4The Evolution of International Corporations
Cultural Marginally Very Somewhat Critically sensitivity important important important important
With whom No one Clients Employees Employees and clients
Level No one Workers and Managers Executives clients
Strategic “One way”/ “Many good “One least-cost “Many good assumption one best way” ways” Way” Ways”
equifinality simultaneously
Adapted from Table 6–4: The Evolution of International Corporations
Phases of Multicultural Development
Characteristics/Activities
Phase I (Domestic Corporations)
Phase II (International Corporations)
Phase III (Multinational Corporations)
Phase IV (Global Corporations)
Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), pp. 7–8.
Potential Problems Associated with Diversity
Attitudinal problems
May cause a lack of cohesion that results in the unit’s inability to take
concerted action or to be productive
Perceptual problems
When culturally diverse groups come together, they often bring
preconceived, erroneous stereotypes with them
Inaccurate biases.
Inaccurate communication
Advantages of Diversity
Can enhance creativity, lead to better decisions, and result in more effective and
productive performance
Can prevent groupthink
Social conformity and pressures on individual members of a group to conform and
reach consensus
Can be very effective team under right conditions
Tasks requiring innovativeness Activities must be determined by the stage of team development
Multicultural Teams
“Multinational teams do not happen naturally –
on the contrary, the human inclination is to stick
to its own kind.”
P. Barnevik
Why Multicultural Teams?
Teams with different profiles are more effective than teams of “stars”
Once settled, multicultural teams work better at:
identifying problem perspectives
generating alternatives
The problem: how to “get settled”
Team Strategies
Task Strategies Creating a sense of purpose
Structuring the task
Assigning roles and responsibilities
Reaching decisions
Process Strategies Team building
Method of communication
Eliciting participation
Resolving conflict
Evaluating performance
Task Strategies
Creating a sense of purpose
What is the team’s mission?
What are the objectives?
Can they be measured?
Who should be a member?
What are the priorities?
Schedule?
Budget?
Quality?
Task Strategies
Structuring the Task
How structured should the agenda be?
How detailed should the rules be?
What needs to be accomplished? By whom?
How important are deadlines?
How will work be divided?
What can be done together? Apart?
Task Strategies
Assigning Roles
Who does what?
Should a leader be assigned? By whom? On what criteria?
What is the leader’s role?
Who needs to attend meetings and when?
Task Strategies
Reaching Decisions
How should decisions be made?
By vote, consensus, compromise?
Who should make the decision?
Leader vs team
Process Strategies
Team Building
How is trust developed?
How much time for social activities?
Process Strategies
Method of Communication
What is the working language? Who decides?
How are fluency imbalances handled?
What technology can be used?
What is an effective presentation?
Process Strategies
Eliciting Participation
How to ensure participation by all?
Are some members more credible?
Is input from some members ignored?
Who listens to whom?
Who interrupts whom?
Process Strategies
Resolving Conflict
How is conflict managed?
Avoided? Confronted?
Who accommodates whom?
Is negotiation win/lose, lose/win, or win/win?
Process Strategies
Evaluating Performance
How and when to evaluate?
Is it a two-way process?
How direct can feedback be?
Guidelines for Effectively Managing Culturally Diverse Groups
1. Select team members for their task-related abilities
2. Team members must recognize and be prepared to deal with their
differences
3. Team leader must help the group to identify and define its overall goal
4. Members must have equal power so that everyone can participate in the
process
5. All members must have mutual respect for each other.
6. Managers must give teams positive feedback on their process and output