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MGT 614

Cross Cultural

Management CHAPTER 11:NATIONAL CULTURES AND CORPORATE CULTURES

CHAPTER 12: TOWARD INTERNATIONAL AND TRANSNATIONAL MANAGEMENT

CHAPTER 15: THE DIVERSITY OF DIVERSITY

AND

THE INTERNATIONAL H. R.

MODULE 7

CHAPTER 11:NATIONAL

CULTURES AND

CORPORATE CULTURES

Cultural Dimensions and Models of

Organization

 When people set up an organization typically its

employees will give meaning to their environment

based on their own particular cultural

programming. For example it may be designed

to remember a family or and impersonal system

designed to achieve targets.

 The cultural dimensions influence the models

people give to organizations and the meanings they attribute to them.

Different Corporate

Cultures  There are four categorical types of corporate culture.

• The Family

• The Eiffel Tower

• The Guided Missile

• The Incubator

.

• They very considerable in how they:

 think and learn, how they change, and how they motivate, reward, and resolve conflicts.

 And . . . .

 Three aspects of organizational structure are especially important in determining

Different Corporate

Cultures And . . . .

 Three aspects of organizational structure are especially

important in determining corporate culture:

 The general relationship between employees and their

organization

 The vertical of hierarchical system of authority defining superiors

and subordinates

 The general view of employees about the organization’s destiny, purpose, and goals and their places in this regards,

The Family Culture

 It is the same as a family. Personal with close face-

to-face relationships, but also hierarchical,

 Power-oriented corporate culture.

 Mimics the home.

The Family Culture (Cont.)

 At its best the power-oriented family culture:

• Exercises power through its members’ acting with one

accord.

• Power is not necessarily over them (the main sanction is loss of affection and place in the family.

• Pressure is moral and social rather than financial or

legal.

• High context (since they share a significant amount of

information and cultural content taken from granted by

members).

The Family Culture (Cont.)

 Relationships tend to be diffuse.

 The general happiness and welfare of all employees are

regarded as the concern of the family-type corporation.

 Power and differential status are seen as “natural”.

 Above the poser of the leader may be that of the state, the political system, the society, or God.

Thinking, Learning, and Change

 The family corporate culture is more interested in

intuitive than in rational knowledge.

Motivating, Rewarding, and Resolving Conflict

 Family members enjoy their relationships, so they

may be motivated more by praise and

appreciation then by money.

 Pay-for-performance rarely sits well with them, as

is true of any motivation that threatens family

bonds.

Resolving Conflict

 The major weakness occurs when interfamily

conflicts block necessary change.

 Resolving conflict often depends on the skills of a

leader.

 The family model gives low priority to efficiency

(doing things right) but high priority to

effectiveness (doing the right things).

The Eiffel Tower Culture

 Its structure is more important that its functions.

• Each higher level has a clear and demonstrable

function of holding together the levels beneath it.

• You obey the boss because it is his or her role to

instruct you. He or she has legal authority to tell you

want to do. And you work according to those

instructions.

• If you and other subordinates did not do so, the

system could not function.

The Eiffel Tower Culture

(Cont.)

 The boss is only incidentally a person.

• It can be easily replaced.

• Little is left to chance or the idiosyncrasies of individuals.

• Relationships are specific and status is ascribed and stays behind the office.

• Here the boss is powerful only because the rules sanction him or her to act.

 Almost everything that the family culture accepts, the Eiffel Tower rejects. Each role at each level of the hierarchy is described, is rated for its difficulty, complexity, and responsibility and has a salary attached to it. It is role oriented.

Thinking, Learning, and Change

 For employees in the Eiffel Tower, the family

culture is

 arbitrary, irrational, conspiratorial, cozy, and

corrupt.

 Learning in the E. Tower means acquiring the skills

necessary to fit a role and develop the skills to

qualify for a higher position. People of “human

resources” are conceived as ‘cash resources”

Thinking, Learning and

Change (Cont.)

 Change is effected through changing rules.

 For this reason the culture does not adapt well to

turbulent environments.

 Change is immensely complex and time

consuming.

 Restructuring and rationalization tent to be

dreaded words in this cultures.

Motivating, Rewarding and

Resolving Conflict

 Employees are ideally precise and meticulous:

 They are nervous in the absence of order and

predictability.

 Conflicts are seen as irrational.

 Criticism and complains are typically channeled

and dealt with through even more rules and fact-

finding procedures.

The Family and the Eiffel

Tower in Conflict

 On page 210 there is a very interesting Case

Scenario for Heinz, a manager from a large

German Multinational and Antonio.

 Antonio’s Story and Heinz’s Story (p. 210)

 What have we learned:

 Heinz represents a very sophisticated Eiffel Tower

culture and Antonio quite an unsophisticated

family one.

The Guided Missile Culture

 This is egalitarian, it differs from the family and

resembles the Eiffel Tower in being impersonal

and task oriented.

 While the rational of the E. T. culture is MEANS, the

guided missile has a rational of ENDS.

 Everything must be done to reach your target.

• It is oriented to tasks, typically undertaken by team

or project groups. People must do “whatever it

takes” to complete a task and what is needed is

often unclear and my have to be discovered.

The National Aeronautics and Space

Administration (NASA) on page 212 is

an example of the Guided Missile

Culture

 The group is egalitarian because it might need to help of any other expert in changing direction toward its target.

 The end is known, but the possible trajectories are uncertain.

 These cultures are expensive, because professionals are expensive.

 Employees will join other groups, for other purposes, within days or weeks and may have multiple memberships.

 This culture is not affectionate or mutually committed, it is more neutral.

Thinking, Learning and

Change

 It uses feedback signals, and is therefore circular

rather than linear.

 Learning includes “getting on” with people.

Appraisal is often by peers or subordinates rather

than by someone further up the hierarchy.

 Change comes quickly to the guided missile

culture. The target moves. More targets appear, new groups are formed. Turnover tend to be high

and loyalties to professional projects are greater

than loyalties to the company .

Motivation, Rewards, and

Resolving Conflict

 Motivations tent to be intrinsic.

• For example the case of Apple: the enthusiasm is

about creating and “insanely great device” .

• The culture tend to be individualistic. The tam is a

vehicle for the shares enthusiasm of its members,

but it is itself dispensable and will be discarded

when the project ends.

• They do not need to know each other intimately

and may avoid doing so. Management by

objectives is the language spoken, and people are

paid by performance.

The Incubator Culture

 These are organizations that provide routine

maintenance and services plant equipment,

insurance, office space, and the like, for embryo

businesses so that these business can lower their

overhead costs during the crucial start-up phase.

Incubator Cultures (Cont.)

 The incubator is both personal and egalitarian.

• The roles of other people in the incubator are

crucial.

• Typical examples include the start-up firms in Silicon

Valley, California.

Incubators (Cont.)

 Incubators operate in an environment of intense emotional

commitments.

 They enjoy the process of creating and innovating.

 It can be the most significant and intense experience of a

lifetime.

 The association is voluntary:

 often fueled largely by hope and idealism

 limited in size: communicate spontaneously and informal with more

than 75 to 100 people.

Thinking, Learning and

Change

 Change in the incubator can be fast and

spontaneous where the members are attuned to

each other.

 American start-up companies with incubator

cultures rarely survive the maturing of their

products and their markets.

Motivating, Rewarding

and Resolving Conflict

 Motivation is often wholehearted, intrinsic, and

intense, with individuals working “70 hours a week

and loving it” .

 Leadership in the incubator is achieved not

ascribed.

Which Countries Prefer

Which Corporate Cultures?

 These “pure types” seldom exist.

 In practice the types are mixed or overlaid, with

one culture dominating .

CH. 12: TOWARD

INTERNATIONAL AND

TRANSNATIONAL

MANAGEMENT

Centralize or

Decentralize?

 The main dilemma:

 Centralize: thereby imposing on foreign cultures

rules and procedures that might affront them

OR

 Decentralize, thereby letting each culture go this

own way, without having any centrally ideas about

improvement, since the “better way” is a local

pathway, not a global one.

Decentralization (Cont.)

 Decentralization is easier under some corporate

cultures than others.

 To decentralize, you have to delegate.

 It might take different forms and they are

different:

- Global vs. Multinational Corporations

and

- International vs. Transnational Corporations

Global and Multinational

Companies

 Global and Multinational Companies are both essentially

centralized in that their subsidiaries relate to the head

company or country, rather than to the other companies or

nations in the group.

 For these companies, there are unlikely to be many foreigners

in the top management team, and the myth of the universal

applicability of management techniques is likely to be strong.

International and

Transnational

Corporations

 In contrast in both international and transnational

corporate structures, there is a significant attempt to overcome the dilemma of centralization vs.

decentralization.

 Each of these in its own way sets out the manage

diversity and gain competitive advantage from

being located in different countries with special capacities .

Difference between International

and Transnational Corporations

 The international corporation moves out influence

from its center to regions and nations retaining a

coordinative role.

 The transnational corporation loses its center in

favor of polycentric influences from different part

of its network.

The Transnational

Corporation

 The transnational corporation is polycentric rather

than being coordinate from the center.

 It consists of several centers of specialized

excellence that will exercise authority and

influence whenever they are qualified to do so.

Example: IKEA

“Value-added chain”

 The point is the “value-added chain”. It does not

really matter anymore who owns the company,

but where the most value is added in the

transnational network.

 The importance here is “knowledge” and

influence flows from wherever that knowledge resides.

CHAPTER 15: DIVERSITY OF

DIVERSITY AND THE

INTERNATIONAL HRM

Are we converging or

diverging?

 As well as differences among nations, other

variables contribute to the way in which people

approach dilemmas.

 One of the most often questions is whether

cultures are converging or diverging and in what

ways.

 It is not only important to consider the seven cultural dimensions that we studied but also issues

such as gender, age, ethnicity, and functional

diversity.

 There are other sources in which differences can be valued.

Potential Sources of

Difference

 There are eight potential sources of difference:

1. Country or national culture

2. Type of industry

3. Religion

4. Job or function

5. Age of respondent

6. Corporation

7. Education level

8. Gender.

Changing Cultures?

 The goal is to help leaders and managers of

enterprises to be more effective in dealing with

different cultures.

 We all recognize that most societies are

increasing in diversity. Many nations now describe

themselves as being “multicultural” as a result of

immigration and migration.

Changing Cultures?

(Cont.)

 Our world has changed even more quickly in the last 50 years through modern technology advances in communications.

 With globalization, we need to ask if cultures are continually evolving

 in parallel with these trend?

 and if they are,

 whether that evolvement is accelerating.

Diversity: A Business

Necessity

 Diversity fundamentally means “variety”. Today more than half of the US workforce consists of minorities, immigrant, and women. In other words, it’s about recruiting people from previously under- represented groups.

 Why should companies concern themselves with diversity?

 Because is wrong to discriminate

 And also because more diverse workforce will increase organizational effectiveness.

 In short, diversity is good for business

Diversity: A business

necessity (Cont.)

 Most people assume that workplace diversity is about increasing representation based on one or more of the following categories:

• Race

• National origin

• Gender

• Class

 It is about recruiting people from previously underrepresented groups.

 Diversity goes beyond simplistic approaches. Diversity should be seen as the rich, varied perspectives and approaches that members of different groups contribute.

INTERNATIONAL HUMAN

RESOURCE

MANAGEMENT

Analyzing Your

International Environment

 To systematically help companies manage in the

global environment, political, economic,

sociocultural, and technological (PEST) analysis

acts as an audit of a company’s environmental

influences to help it determine its strategy and HR

response.

Types of Organization

 Global

 Transnational

 International

 Multinational

 And the relationship between

 Efficiency

 And

 Local Responsiveness

Managing Your

International Operations

 There are three main ways a company can staff

an international operation.

1. Send people from its home country.

2. Hire host-country nationals to do the managing.

3. Hire third-country nationals.

 Most companies use all three for staffing their

multinational operations.

Recruiting Internationally

 For most large corporations, the majority of current and potential

employees are located outside the United States.

 Work permit or visa – A government document granting a

foreign individual the right to seek employment

 Guest workers – Foreign workers invited to perform needed labor

 Hiring non-nationals can result in lower direct labor costs, but

non-direct costs (housing, language training, health services,

recruiting, transportation, and so on) can be substantial.

Selecting Employees

Internationally Selecting Global Managers

 Global manager – A manager equipped to run an international business

 Cultural environment – The communications, religion, values and

ideologies, education, and social structure of a country

 Failure rate – The percentage of expatriates who do not perform

satisfactorily

Expatriate Selection Criteria

 Expatriate selection decisions are typically made based upon the

technical competence of candidates as well as their professional

and international experience.

 Plus . . .

 individual’s ability to adapt to different environments.

 his or her flexibility,

 emotional maturity and stability,

 empathy for the culture, language and

 communication skills,

Causes of

Expatriate Assignment Failure

 Family adjustment

 Lifestyle issues

 Work adjustment

 Bad selection

 Poor performance

 Other opportunities arise

 Business reasons

 Repatriation issues

Training and

Development

 Once people are selected to be sent abroad, it is

critical to their success to provide them with

training.

 Not only is this type of training important for

expatriate managers, it is also important for

the foreign employees they will ultimately supervise.

Compensation

 One of the most complex areas of international HRM is

compensation.

 Different countries have different norms for employee

compensation.

 In general, a guiding philosophy for designing pay systems might be “think globally and act locally.”

Performance Appraisal

 It can be difficult for the home office to evaluate the

performance of employees working abroad.

 Cultural differences are going to play an important role here.

Who Should Appraise Performance?

Analyzing the

International Labor

Environment  A country’s labor environment plays a large role in international business

and HR decisions.

 Union strength depends on many factors, such as:

 The level of employee participation

 Per capita labor income

 Mobility between management and labor

 Homogeneity of labor (racial, religious, social class)

 Unemployment levels

Collective Bargaining

in Other Countries

 The process of collective bargaining can vary widely in other countries

when compared to the United States, especially with regard to the role of

government.

References

 Managing Human Resources (18th Ed.) Snell &

Morris Publisher: Thomson Southwestern

 Trompenaars, F. & Hampden-Turner, Ch. (2013),

Riding The Waves of Culture