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Chapter 6: Organizational Cultures and Diversity

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Title: Chapter 6: Organizational Cultures and Diversity


1
PowerPoint slides by R. Dennis Middlemist,
Professor of Management, Colorado State University
2
Organizational 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.

3
The Nature of Organizational Culture
  • 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.

4
The Nature of Organizational Culture
  • 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

5
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

6
Cultural Variations
Table 61 Dimensions of Corporate Culture
Motivation
Relationship
Identity
Adapted from Table 6.1 Dimensions of Corporate
Culture
7
Cultural Variations
Table 61 Dimensions of Corporate Culture
Communication
Control
Adapted from Table 6.1 Dimensions of Corporate
Culture
8
Cultural 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
9
Europeans 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
10
Europeans 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
11
European 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
12
European 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
13
Organizational 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

14
Organizational 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.

15
Organizational Cultures in MNCs
Adapted from Figure 62 Organizational Cultures
16
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
  • 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

17
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
    hierarchyimpersonal and efficient and loyalties

18
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

19
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

20
Four 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
21
Four 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
22
Four 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
23
Phases 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
24
Phases 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
25
Phases 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
26
Phases 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
27
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.
28
Types 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

29
Potential 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

30
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

31
Understanding the Conditions for Effectiveness
Highly ineffective
Average effectiveness
Highly effective
Adapted from Figure 65 Group Effectiveness and
Culture
32
Guidelines 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
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