Title: Chapter 6: Organizational Cultures and Diversity
1PowerPoint slides by R. Dennis Middlemist,
Professor of Management, Colorado State University
2Organizational Cultures and Diversity
- The specific objectives of this chapter are
- EXAMINE some of the major ethical issues and
problems confronting MNCs in selected countries. - DISCUSS some of the pressures on and action being
taken by selected industrialized countries and
companies to be more socially responsive to world
problems.
3The 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.
4The Nature of Organizational Culture
- Shared values and beliefs that enable members to
understand their roles and the norms of the
organization, including
- A philosophy that is set forth in the MNCs
beliefs regarding how employees and customers
should be treated. - Rules that dictate the dos and donts of
employee behavior relating to areas such as
productivity, customer relations, and intergroup
cooperation. - Organizational climate, or the overall atmosphere
of the enterprise as reflected by the way that
participants interact with each other, conduct
themselves with customers, and feel about the way
they are treated by higher-level management
5Interaction 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
6Cultural Variations
Table 61 Dimensions of Corporate Culture
Motivation
Relationship
Identity
Adapted from Table 6.1 Dimensions of Corporate
Culture
7Cultural Variations
Table 61 Dimensions of Corporate Culture
Communication
Control
Adapted from Table 6.1 Dimensions of Corporate
Culture
8Cultural Variations
Table 61 Dimensions of Corporate Culture
Conduct
Source Reported in Lisa Hoecklin, Managing
Cultural Differences Strategies for Competitive
Advantage (Workingham, England Addison-Wesley,
1995), p. 146.
Adapted from Table 6.1 Dimensions of Corporate
Culture
9Europeans Perceptions of Cultural Dimensions of
U.S. Operations/Same MNC
Adapted from Figure 61 Europeans Perception of
the Cultural Dimensions of U.S. Operations (A)
and European Operations (B) of the Same MNC
10Europeans Perceptions of Cultural Dimensions of
European Operations/Same MNC
Adapted from Figure 61 Europeans Perception of
the Cultural Dimensions of U.S. Operations (A)
and European Operations (B) of the Same MNC
11European Management Characteristics
Table 62 European Management Characteristics
Characteristic
Corporate Commercial Administrative Industrial Fam
ilial
Management attributes Behavior Experiential Profe
ssional Developmental Convivial Attitude Sensatio
n Thought Intuition Feeling
Institutional models Function Salesmanship Contro
l Production Personnel Structure Transaction Hier
archy System Network
Societal ideas Economics Free
Market Dirigiste Social market Communal Philosoph
y Pragmatic Rational Holistic Humanistic
Adapted from Table 62 European Management
Characteristics
12European Management Characteristics
Table 62 European Management Characteristics
Characteristic
Cultural images Art Theatre Architecture Music Da
nce Culture (Anglo-Saxon) (Gallic) (Germanic) (La
tin)
Source Reported in Lisa Hoecklin, Managing
Cultural Differences Strategies for Competitive
Advantage (Workingham, England Addison-Wesley,
1995), p. 149.
Adapted from Table 62 European Management
Characteristics
13Organizational Cultures in MNCs
- There are four steps in the integration of
organizational cultures in international
expansions that result from mergers or
acquisition - The two groups have to establish the purpose,
goal, and focus of their merger - They have to develop mechanisms to identify the
most important organizational structures and
management roles - They have to determine who has authority over the
resources needed for getting things done - They have to identify the expectations of all
involved parties and facilitate communication
between both departments and individuals in the
structure
14Organizational Cultures in MNCs
- Three aspects of organizational functioning that
are important in determining MNC organizational
culture - The general relationship between the employees
and their organization - The hierarchical system of authority that defines
the roles of managers and subordinates - The general views that employees hold about the
MNCs purpose, destiny, goals, and their places
in them.
15Organizational Cultures in MNCs
Adapted from Figure 62 Organizational Cultures
16Organizational 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
- 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
17Organizational 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
hierarchyimpersonal and efficient and loyalties
18Organizational 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
19Organizational 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
20Four Corporate Cultures
Table 63 Summary Characteristics of the Four
Corporate Culture
Relationships between employees
Diffuse relation-ships to organic whole to which
one is bonded
Specific role in mechanical system of required
interaction
Specific tasks in cybernetic system targeted on
shared objectives
Diffuse, spontaneous relationships growing out of
shared creative process
Attitude toward authority
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
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
Adapted from Table 63 Summary Characteristics
of the Four Corporate Culture
21Four Corporate Cultures
Table 63 Summary Characteristics of the Four
Corporate Culture
Attitudes toward people
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
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
Adapted from Table 63 Summary Characteristics
of the Four Corporate Culture
22Four Corporate Cultures
Table 63 Summary Characteristics of the Four
Corporate Culture
Criticism and conflict resolution
Turn other cheek, save others 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.
Adapted from Table 63 Summary Characteristics
of the Four Corporate Culture
23Phases of Multicultural Development
Table 64 The 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) Pro
duct Process Engineering not Product and
engineering engineering emphasized process emph
asized emphasized engineering
Adapted from Table 64 The Evolution of
International Corporations
24Phases of Multicultural Development
Table 64 The Evolution of International
Corporations
Technology Proprietary Shared Widely shared
Instantly and extensively shared RD/sal
es 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 64 The Evolution of
International Corporations
25Phases of Multicultural Development
Table 64 The Evolution of International
Corporations
Exports None Growing, high Large, saturated
Imports and potential exports Structure
Functional Functional with Multinational lines
Global alliances, divisions international of
business hierarchy division Centralized
Decentralized Centralized Coordinated,
decentralized Primary Product/service
Market Price Strategy orientation Strategy
Domestic Multidomestic Multinational
Global Perspective Ethnocentric Polycentric/
Multinational Global/ regiocentric
multicentric
Adapted from Table 64 The Evolution of
International Corporations
26Phases of Multicultural Development
Table 64 The Evolution of International
Corporations
Cultural Marginally Very Somewhat Critically
sensitivity important important important importa
nt 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
Source Nancy J. Adler, International Dimensions
of Organizational Behavior, 2nd ed. (Boston
PWS-Kent Publishing, 1991), pp. 78.
Adapted from Table 64 The Evolution of
International Corporations
27International 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.
28Types of Multiculturalism
- Domestic multiculturalism
- Multicultural and diverse workforce that operates
in the MNCs home country - Group multiculturalism
- Homogeneous groups
- Token groups
- Bicultural groups
- Multicultural groups
29Potential Problems Associated with Diversity
- Attitudinal problems
- May cause a lack of cohesion that results in the
units 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
30Advantages 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
31Understanding the Conditions for Effectiveness
Highly ineffective
Average effectiveness
Highly effective
Adapted from Figure 65 Group Effectiveness and
Culture
32Guidelines for Effectively Managing Culturally
Diverse Groups
- Select team members for their task-related
abilities - Team members must recognize and be prepared to
deal with their differences - Team leader must help the group to identify and
define its overall goal - Members must have equal power so that everyone
can participate in the process - All members must have mutual respect for each
other. - Managers must give teams positive feedback on
their process and output