Chapter 7
ORGANIZATIONAL
CULTURES AND
DIVERSITY
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Chapter 2
THE NON ECONOMIC
ENVIRONMENT FOR
INTERNATIONAL MANAGEMENT
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Definition and Characteristics
 Organizational
Culture: Observed behavioral
regularities, as typified by common language,
terminology, and rituals
– Norms
 amount of work to be done
 degree of cooperation between management and
employees
– Dominant values that the organization advocates
 high product and service quality
 low absenteeism
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Organizational Culture Continued
– A philosophy regarding how employees and
customers should be treated
– Rules that dictate the do’s and don’ts of employee
behavior relating to:
 productivity
 customer relations
– Organizational climate
 How participants interact with
each other, conduct
themselves with customers…
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Organizational Cultures in MNCs
 Aspects
in determining MNC organizational
culture:
 The 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 MNC’s purpose,
destiny, goals, and their places in them
 4 types of organizational
 Family
 Eiffel Tower
 Guided Missile
 Incubator
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Organizational Cultures
Equity
Fulfillment-oriented
culture
INCUBATOR
Project-oriented
culture
GUIDED MISSILE
Person
Task
FAMILY
EIFFEL TOWER
Power-oriented
culture
Role-oriented
culture
Hierarchy
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Family Culture
Strong emphasis on the hierarchy
and orientation to the person
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headed by a leader who is regarded as a caring parent
personnel look to leaders for both guidance and approval in
exchange for looking after them
characterized by traditions, customs, and associations that bind
together the personnel
and make it difficult for outsiders to become members
EX.) Turkey, Venezuela, China, and Singapore
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Eiffel Tower Culture
Strong emphasis on the hierarchy and
orientation to the task -- impersonal and
efficient
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Jobs are well defined
everything is coordinated from the top.
Person holding top position could be replaced at any time
without having an effect on the work being done
assessment centers, appraisal systems, training and
development programs, and job rotation are common in
managing human resources.
Ex.) North American and Northwest European countries
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Guided Missile Culture
Strong emphasis on equality in the work
place and orientation to the task
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Teams and project groups are common
Formal hierarchical considerations are given low priority
and individual expertise is of greater importance
360-degree feedback systems are common
Change comes quickly
Ex.) United States and United Kingdom
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Incubator Culture
Strong emphasis on equality and personal
orientation
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based on the concept that organizations are secondary to the
fulfillment of the individuals within them
Little formal structure -- participants are there to perform roles
This culture is composed of creative work teams
Change is fast and spontaneous
Leadership is achieved, not gained by position
Ex.) entrepreneurial companies
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Managing Multiculturalism and
Diversity
 Phases
of Multicultural
Development
 Phase I - Domestic corporations
 Phase II - International corporations
 Phase III - Multinational corporations
 Phase IV - Global corporations
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
Types of Multiculturalism
– Domestic Multiculturalism
– Group Multiculturalism
 Homogeneous groups
 Token groups
 Bicultural groups
 Multicultural groups
Potential Problems Associated with Diversity
 Mistrust of others
 Perceptions and preconceived stereotypes
 Inaccurate biases
 Miscommunication (misunderstandings & different uses of
time)
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 Advantages
of Diversity
 Generation of more and better
ideas
 Prevents “groupthink”
 Culturally diverse groups can
enhance creativity, lead to better
decisions, and result in more
effective and productive
performance
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Using the Proper Guidelines
1. Team members must be selected for their task-related
abilities and not solely based on ethnicity -- Routine Task - want homogeneity
. Innovative task - want multiculturalism
2. Team members must recognize and be prepared to
deal with their differences -. recognize their own stereotypes
3. diverse teams tend to have more difficulty agreeing on
their purpose and task than members of homogenous
groups
. the team leader must help the group to identify and
define its overall goal
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4.
Members must have equal power so
that everyone can participate in the
process
5. all members have mutual respect for
each other
6. Managers must give positive
feedback on processes and output
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