Organizational culture

The Nature of Culture
Culture defined: Acquired knowledge that
people use to interpret experience and
generate social behavior. This
knowledge forms values, creates
attitudes, and influences behavior.
Characteristics of Culture
 Shared
 Trans-generational
 Symbolic
 Patterned
 Adaptive
Priorities of Cultural Values
A Model of Culture
Business Customs in South Africa
Arrange meeting before discussing
business over phone.
 Make appointments as far in advance as
 Maintain eye contact, shake hands,
provide business card
 Maintain a win-win situation
 Keep presentations short
Values in Culture
Learned from culture in which individual is
 Differences in cultural values may result in
varying management practices
 Basic convictions that people have about
Right and wrong
 Good and bad
 Important and unimportant
Value Similarities and Differences
Across Cultures
Strong relationship between level of
managerial success and personal values
Value patterns predict managerial success and
can be used in selection/placement decisions
Country differences in relationship between
values and success; however, findings across
U.S., Japan, Australia, India are similar
Values of more successful managers favor
pragmatic, dynamic, achievement-oriented and
active role in interaction with others
Values of less successful managers tend
toward static and passive values; relatively
passive roles in interacting with others
Hofstede’s Cultural Dimensions
Power distance
Uncertainty avoidance
Hofstede’s Cultural Dimensions
Power distance: Less powerful
members accept that power is distributed
High power distance countries: people
blindly obey superiors; centralized, tall
structures (e.g., Mexico, South Korea, India)
 Low power distance countries: flatter,
decentralized structures, smaller ratio of
supervisor to employee (e.g., Austria,
Finland, Ireland)
Hofstede’s Cultural Dimensions
Uncertainty avoidance: people feel threatened by
ambiguous situations; create beliefs/institutions to
avoid such situations
High uncertainty avoidance countries: high need for
security, strong belief in experts and their knowledge;
structure organizational activities, more written rules, less
managerial risk taking (e.g., Germany, Japan, Spain)
Low uncertainty avoidance countries: people more willing
to accept risks of the unknown, less structured organizational
activities, fewer written rules, more managerial risk taking,
higher employee turnover, more ambitious employees (e.g.,
Denmark and Great Britain)
Hofstede’s Cultural Dimensions
Individualism: People look after selves
and immediate family only
High individualism countries: wealthier,
protestant work ethic, greater individual
initiative, promotions based on market value
(e.g., U.S., Canada, Sweden)
 High collectivism countries: poorer, less
support of Protestant work ethic, less
individual initiative, promotions based on
seniority (e.g., Indonesia, Pakistan)
Hofstede’s Cultural Dimensions
Masculinity: dominant social values are
success, money, and things
High masculine countries: stress earnings,
recognition, advancement, challenge, wealth;
high job stress (e.g., Germanic countries)
High feminine countries: emphasize caring for
others and quality of life; cooperation, friendly
atmosphere., employment security, group
decision making; low job stress (e.g., Norway)
Strategic Predispositions
Ethnocentric predisposition
A nationalistic philosophy of management
whereby the values and interests of the
parent company guide strategic decisions.
Strategic Predispositions
Polycentric predisposition
A philosophy of management whereby strategic
decisions are tailored to suit the cultures of the
countries where the MNC operates.
Strategic Predispositions
Regio-centric predisposition
A philosophy of management whereby the firm
tries to blend its own interests with those of its
subsidiaries on a regional basis.
Strategic Predispositions
Geocentric predisposition
A philosophy of management whereby the
company tries to integrate a global systems
approach to decision making.
Meeting the Challenge
The Globalization Imperative:
Belief that one worldwide approach to doing business
is key to efficiency and effectiveness.
Many factors facilitate the need to develop unique
strategies for different cultures:
Diversity of worldwide industry standards
Continual demand by local customers for differentiated
Importance of being insider as in case of customer who
prefers to “buy local”
Difficulty of managing global organizations
Need to allow subsidiaries to use own abilities and talents
unconstrained by headquarters
Globalization vs. National Responsiveness
Advertising (for example)
Avoid reasoning or logic
Advertising predominantly emotional, dramatic, symbolic
Spots viewed as cultural events – art for sake of money – and
reviewed as if they were literatures or films
Value laughter above all else
Typical broad, self-deprecating British commercial amuses by
mocking both advertiser and consumer
Want factual and rational advertising
Typical German spot features standard family of 2 parents, two
children, and grandmother
Globalization vs.
National Responsiveness
How to add value to marketing:
Tailor advertising message to particular
 Stay abreast of local market conditions;
don’t assume all markets basically same
 Know strengths and weaknesses of MNC
subsidiaries; provide them assistance in
addressing local demands
 Give subsidiary more autonomy; let it
respond to changes in local demand
Cross-Cultural Differences and
Parochialism and Simplification
Parochialism: view world through own eyes
and perspectives
 Simplification: exhibit same orientation toward
different cultural groups
Differences and Similarities
Similarities across cultures:
Not possible to do business same way in every
global location
Procedures and strategies that work well at home
can’t be adopted overseas without modifications
Some similarities have been found
Russia and U.S. (for example)
Traditional management
Human resources
Networking activities
OB Mod
Differences and Similarities
Differences across cultures
Far more differences than similarities found in
cross-cultural research
 Wages, compensation, pay equity, maternity
 Importance of criteria used in evaluation of
Cultural Differences in Selected
Countries and Regions
Doing Business in Russia
Build personal relationships with partners. When there
are contract disputes, there is little protection for the
aggrieved party because of the time and effort needed to
legally enforce the agreement.
Use local consultants. Because the rules of business
have changed so much in recent years, it pays to have a
local Russian consultant working with the company.
Ethical behavior in the United States is not always the
same as in Russia. For example, it is traditional in
Russia to give gifts to those with whom one wants to
transact business.
Be patient. In order to get something done in Russia, it
often takes months of waiting.
Cultural Differences in Selected
Countries and Regions: Russia
Russians like exclusive arrangements and often
negotiate with just one firm at a time.
Russians like to do business face-to-face. So when
they receive letters or faxes, they often put them on
their desk but do not respond to them.
Keep financial information personal. Russians wait
until they know their partner well enough to feel
comfortable before sharing financial data.
Research the company. In dealing effectively with
Russian partners, it is helpful to get information about
this company, its management hierarchy, and how it
typically does business.
Cultural Differences in Selected
Countries and Regions: Russia
Stress mutual gain. The Western idea of “win–win” in
negotiations also works well in Russia.
Clarify terminology. The language of business is just
getting transplanted in Russia so double-check and
make sure that the other party clearly understands the
proposal, knows what is expected and when, and is
agreeable to the deal.
Be careful about compromising or settling things too
quickly because this is often seen as a sign of
Russians view contracts as binding only if they
continue to be mutually beneficial, so continually show
them the benefits associated with sticking to the deal.
Organizational Cultures and Diversity
The Nature of Organizational Culture
Organizational culture: shared values and
beliefs enabling members to understand their
roles and the norms of the organization,
Observed behavioral regularities, typified by
common language, terminology, rituals
Norms, reflected by things such as amount of work
to do and degree of cooperation between
management and employees
Dominant values organization advocates and
expected participants to share (e.g., low
absenteeism, high efficiency)
Organizational Culture (continued)
Other values and beliefs:
Philosophy set forth regarding how to treat
employees and customers
 Rules dictating do’s and don’ts of employee
behavior pertaining to productivity
intergroup cooperation…
 Organizational climate as reflected by way
participants interact with each other, treat
customers, and feel about how treated by
senior level management
Interaction between National and Organizational
National cultural values of employees
may significantly impact their
organizational performance
 Cultural values employees bring to
workplace are not easily changed by
Organizational Cultures in MNCs
Shaped by numerous factors including
cultural preferences of leaders and
 Some MNCs have subsidiaries that
(aside from logo and reporting
procedures) wouldn’t be easily
recognizable as belonging to same MNC
Organizational Culture in MNCs
Four steps in integration of organizational
cultures resulting from international
expansion via mergers/acquisitions:
Two groups establish purpose, goals, and focus
of merger
Develop mechanisms to identify most important
structures and manager roles
Determine who has authority over resources
Identify expectations of all involved participates
and facilitate communication between
departments and individuals
Overall Communication Process
Communication: The process of
transferring meanings from sender to
 On surface appears straightforward
 However, a great many problems can
result in failure to transfer meanings
Verbal Communication Styles
Context is information that surrounds a
communication and helps convey the
 Context plays a key role in explaining many
communication differences
 Messages often highly coded and implicit in
high-context society (e.g., Japan, many Arab
 Messages often explicit and speaker says
precisely what s/he means in low context
society (e.g., U.S. and Canada)
Verbal Communication Styles
Indirect and Direct Styles
High-context cultures: messages implicit
and indirect; voice intonation, timing, facial
expressions play important roles in
conveying information
 Low-context cultures: people often meet
only to accomplish objectives; tend to be
direct and focused in communications
Communication Barriers
Language barriers
 Cultural barriers
Be careful not to use generalized statements about
benefits, compensation, pay cycles, holidays,
policies in worldwide communication
Most of world uses metric system so include
converted weights and measures in all
Even in English-speaking countries, words may
have different meanings.
Communication Barriers
Cultural barriers (continued)
Letterhead and paper sizes differ worldwide
 Dollars aren’t unique to U.S. Also Australian,
Bermudian, Canadian, Hong Kong,
Taiwanese, and New Zealand dollars.
Clarify which dollar.
Perceptual Barriers
Perception: a person’s view of reality
 Advertising Messages: countless
advertising blunders when words are
misinterpreted by others
 How others see us: May be different than
we think
Common Forms of
Nonverbal Communication
Nonverbal Communication
Nonverbal communication
Transfer of meaning through means such as body
language and use of physical space
Use of color to communicate messages
Study of communication through body movement and
facial expression
Eye contact
Nonverbal Communication
Study of way people use physical space to convey
Intimate distance used for very confidential
Personal distance used for talking with family/close friends
Social distance used to handle most business transactions
Public distance used when calling across room or giving
talk to group
Personal Space in U.S.
Communication Effectiveness
Improve feedback systems
 Language training
 Cultural training
 Flexibility and cooperation
Negotiating Styles
Managing Cross Cultural Negotiations
Negotiation: Process of bargaining with
one more parties at arrive at solution
acceptable to all
 Two types of negotiation:
Distributive when two parties with opposing
goals compete over set value
 Integrative when two groups integrate
interests, create value, invest in the
agreement (win-win scenario)
Negotiation Types and
Steps of the Negotiation Process:
Interpersonal relationship building
Exchange of task related information
Cultural Differences Affecting Negotiations
Don’t identify counterpart’s home culture too quickly; common
cues such as accent may be unreliable.
Beware of Western bias toward “doing”. Ways of being,
feeling, thinking, talking can shape relationships more
powerfully than doing.
Counteract tendency to formulate simple, consistent, stable
Don’t assume all aspects of culture are equally significant.
Recognize norms for interactions involving outsiders may
differ from those for interactions between compatriots.
Don’t overestimate familiarity with counterpart’s culture.
Negotiation Tactics
 Time limits
 Buyer-seller relationship
 Bargaining behaviors
Use of extreme behaviors
 Promises, threats and other behaviors
 Nonverbal behaviors
Supermarket Lab Exercise
Project is about..
Shanghai Disneyland
The most recent Disneyland in
the world
Planning to expand rapidly
The goal of the project is
to propose ONE attraction for
Shanghai Disneyland’s future
expansion, the one that your
team will bring the most
success to Shanghai
Disneyland (the “killer”
Exercise Process
Step 1: Each person needs to figure out what is your
killer attraction. (a one-page description is due on
Nov 23)
Step 2: Exchange your idea with your partners
Set up at least TWO meetings for all team members, each
for about 30-45 minutes
First meeting to know each other and to exchange ideas
Second meeting to continue discussion to reach an agreement
Step 3: Class presentation (Nov 23)
Report and present the communication process between you
and your partner.
At the end of the presentation, use 3 key words to describe
your partner.
Some expectations
For the collaboration/negotiation process:
Be Creative
Be collaborative, but it doesn’t mean to be compromised
Be aware of communication/technology/cultural barriers
Have fun in the process, but also think about the 5 steps of
For presentation:
Use the concepts we have learnt as a guideline when
explaining what has happened in the exercise (e.g., What
kind of communication barriers you have encountered, and
how you have overcome them)
A picture is worth a thousand words.
Report the funny details in your negotiation/collaboration
Project description
Each team will be responsible for giving a 10
minutes presentation to report the final result of
collaboration and communication/negotiation
 The evaluation of this exercise is based on the
quality of both your oral presentation and your