Chapter 3-Organizational Cultures
and Diversity
Chapter 3(1): Organisational Culture, Diversity
&Multiculturalism
Chapter 3(2): Organisational Culture
Chapter 3(3): Diversity
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Cross-Cultural Management
Chapter 3(1):
Organisational Culture, Diversity &
Multiculturalism
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Cross-Cultural Management
Acknowledging Culture
Cultural diversity can exist on a national and
cross-national level
Often, managers assume that culture does not
play an important role in shaping practices =>
Universalistic approach: ‘if it works here, it will
work there’
Such approach contributed to high failure rates in
expatriate missions and international mergers
In order to manage cross-cultural differences,
managers need to acknowledge and understand
them
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Cross-Cultural Management
Diversity-Related Problems
Increased ambiguity
Increased complexity and confusion
Difficulty to converge meanings and
Miscommunication
Lower cohesiveness
Harder to reach agreement
Harder to make decisions and agree on
specific actions
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Cross-Cultural Management
Diversity-Related Advantages
Expanding meanings and
Broader cognitive frame & resources
Multiple perspectives
Multiple interpretations
Richer alternatives & more ideas
Increased creativity and problem solving skills
Increased flexibility
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Cross-Cultural Management
Diversity and Types of
Organizations
• Organizational culture affects the acceptance and
impact of diversity in organizations
• Parochial: Our is the only way
• Ethnocentric: Our way is best
• Pluralistic (synergetic): The best is combining
our ways and their ways
In large companies, different divisions may have
different sub-cultures
The more complex, unpredictable and global is the
business environment of a company, the more
competitive advantages cultural diversity has.
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Cross-Cultural Management
Nature of Organizational Culture
• Organizational culture
– Pattern of basic assumptions that are
developed by a group as it learns to cope
with problems of external adaptation and
internal integration and that are taught to
new members as the correct way to
perceive, think, and feel in relation to these
problems
– An MNC’s organizational culture in one
country’s facility may differ sharply from
those in other countries
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Cross-Cultural Management
Nature of Organizational Culture
• Interaction Between National and Organizational
Cultures
– National cultural values of employees have
a significant impact on organizational
performance
– Cultural values that employees bring to the
workplace are not easily changed by the
organization
– Substantial differences may be observed
among subsidiaries that cause coordination
problems
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Cross-Cultural Management
Organizational Cultures in MNCs
• Integration of organizational cultures is crucial
following mergers and acquisitions
– Integration process consists of:
• Establishing a common purpose, goal, and focus
• Identifying important organizational structures
and roles
• Determining who has authority over resources
• Identifying the expectations of all involved parties
and facilitating communication between the
parties
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Cross-Cultural Management
Organizational Cultures in MNCs
(cont.)
• Family culture
– Strong emphasis on hierarchy and person
orientation
• Power-oriented with paternalistic leader
• Leader looked to for guidance
• Can catalyze and multiply employees’ energy
• Reliance on intuition rather than rational
knowledge
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Cross-Cultural Management
Organizational Cultures in MNCs
(cont.)
• Eiffel tower culture
– Strong emphasis on hierarchy and task
orientation
• Employees know what to do
• Coordination from the top
• Methodic approach to motivating and
rewarding people and resolving conflict
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Cross-Cultural Management
Organizational Cultures in MNCs
(cont.)
• Guided missile culture
– Strong emphasis on equality in the
workplace and orientation to the task
• Work typically undertaken by teams or project
groups
• Low priority attached to hierarchical concerns
• Employs a “cybernetic” structure
• Culture may change quickly
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Cross-Cultural Management
Organizational Cultures in MNCs
(cont.)
• Incubator culture
– Strong emphasis on equality & personal
orientation
• Organizations are secondary to the fulfillment
of individuals
• Organization is an incubator for selfexpression and self-fulfillment
• Participants have intense emotional
commitment to their work
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Cross-Cultural Management
Organizational Cultures
Equity
Fulfillment-oriented Project-oriented
culture
culture
INCUBATOR
GUIDED MISSILE
Person
Emphasis
Task
Emphasis
FAMILY
Power-oriented
culture
EIFFEL TOWER
Rule-oriented
culture
Hierarchy
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Cross-Cultural Management
Processes & Implications
Attraction-Selection-Attrition framework
• Where do you advertise for jobs?
• Who interviews and selects candidates?
• What type of people is the company
(implicitly and explicitly) looking for?
• Who gets promoted?
• Mentoring
• Networking
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Cross-Cultural Management
Examples
• Knowledge workers
• Medical doctors & nurses
• University academics
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Cross-Cultural Management
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Cross-Cultural Management
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Cross-Cultural Management
Chapter 3(2) ORGANIZATIONAL CULTURE
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Cross-Cultural Management
CULTURE REVIEWED
• Organizations also have a learned, shared,
interrelated set of symbols and patterns of basic
assumptions
• The culture help the organizations cope with
problems it faces
– external adaptation
– internal integration
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Cross-Cultural Management
CULTURE REVIEWED
CULTURE HELPS ORGANIZATIONS INTEGRATE
INTERNALLY (PPS) AND ADAPT/SHAPE EXTERNALITIES
(6 GLOBAL ENVIRONMENTS) TO SURVIVE.
• Culture permeates the organization
– Through knowledge acquisition
– Organizational symbols
– Organizational stories
– Organizational rites
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Cross-Cultural Management
ORGANIZATIONAL KNOWLEDGE
• Explicit—formalized and widely distributed
• Implicit—norms or “how we do things around
here”
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Cross-Cultural Management
EXAMINE ORGANIZATIONAL
SYMBOLS
• What language is in use and where?
• Who is pictured on annual reports, web pages,
or brochures?
• What colors represent the company; where are
they used?
• What logos are in use?
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Cross-Cultural Management
ORGANIZATIONAL STORIES
TELL US
• what the employee is supposed to do when in
doubt
• what to do when a high-status person breaks the
rules
• how the little person advances within the
organization
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Cross-Cultural Management
ORGANIZATIONAL RITES
REINFORM NORMS
• Rites of degradation dissolve a person’s
organizational identity
• Rites of enhancement recognize
accomplishments or enhance power
• Rites of renewal lubricate social relations
• Rites of conflict reduction reduces conflict by
partitioning it
• Rites of integration revive common feeling
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Cross-Cultural Management
NATIONS TRADITIONALLY
SHAPE ORGANIZATIONS
HOW DOES CULTURE
AFFECT FIRMS?
Traditionally: national culture shapes business
BUSINESS ACTIVITIES
Business culture
INDIVIDUALS
FAMILIES
NATIONAL CULTURE
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Cross-Cultural Management
BUT INFLUENCES COME FROM
MULTIPLE SOURCES
• Professional training/groups
• Family
• Subgroups, e.g., R&D or accounting
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Cross-Cultural Management
INCREASINGLY WE ALSO SEE
• business influences come not only from
domestic influences but also from international
and global business activities, e.g.,
– subsidiaries
– joint ventures and other strategic alliances
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Cross-Cultural Management
OFTEN CREATING CULTURE
CLASH
• between parent and subsidiary
• among managers
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Cross-Cultural Management
THUS IN A GLOBAL WORLD, BUSINESSES BECOME
CULTURAL CONDUITS
See page 207 of Introduction to Globalization
and Business by Barbara Parker
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Cross-Cultural Management
BUSINESS INFLUENCES
CULTURE THROUGH
– Global entertainment and electronic media
– Global travel
– Global language
– Global demographic groups
• Global elite
• Global teens
– Business behaviors
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Cross-Cultural Management
GLOBAL INFLUENCES OF
BUSINESS ON CULTURE
• Make global businesses more central to
– Cultural change
– Cultural concerns
– And cause them to interact more with social
actors such as NGOs and governments
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Cross-Cultural Management
Chapter 3(3) DIVERSITY
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Cross-Cultural Management
Diversity Defined
• Human diversity
– Visible
– Less or invisible
• Diverse structural configurations
• Diverse processes
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Cross-Cultural Management
Global Organizations Emphasize
Inclusive Networks When They
• a) reexamine their norms or traditional ways of
doing things
• b) seek and value similarities as well as
differences as sources of competitive advantage,
and
• c) train people for skills that enhance a sense of
inclusion
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Cross-Cultural Management
Diversity Initiatives
Communications
Education and Training
Employee Involvement
CEO speeches
Diversity briefings for
managers
Task forces on diversity
Written diversity policy;
diversity brochures
Awareness training for
everyone
Interest groups for members of
diverse populations
Second language publications
Diversity skills training
Company time provided for
diversity planning
Reports to the public or to
shareholders
Multicultural team training
Networking groups
Press releases
Sexual harassment training
Career Development
Performance and
Accountability
Mentoring
Define behaviors that enhance
inclusion
Succession planning for
diversity
Monitor and report on diversity
progress
Individual development plans
Link rewards to achieving
diversity objectives
Assign people to diverse jobs
over a career
Develop diversity measures
that are both qualitative and
quantitative
Networking directories
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Cross-Cultural Management
Approaches to Managing Human
Diversity
• Discrimination and fairness
• Access and legitimacy
• Learning
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Cross-Cultural Management
Strategic Responses for Managing
Diversity and their Implementation
Reactive
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Choose to risk fines or other costs,
rather than engage in equal
employment opportunity practices
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Choose geographic locations for the
business which avoid diversity / where
the local workforce does not contain
protected classes
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In response to a governmental
employment audit, provide a
workshop for protected groups on
“how to succeed by adapting to fit
into the organization”
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Regular sexual harassment training
which focuses on how to avoid legal
liability
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Performance appraisal standards for
managers include specific targets /
quotas for hiring of protected groups
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To increase diversity awareness for
managers, bring in a speaker to tell
them how to value the diversity of
their employees
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Sponsor an annual event that
celebrates a protected group, e.g.,
Special Olympics
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To ensure equal pay, program the HR
computerized management system to
annually review and adjust pay
differentials between non-protected and
protected groups
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Pilot an employee network
conference that engages employees
and their managers in reciprocal
learning activities
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Regularly include vendors, suppliers,
and customers in the organization’s
diversity training offerings to increase
their involvement in and contribution to
diversity efforts
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Different business units continually
share information about their diversity
successes and failures, then adapt and
integrate them into their businesses
Marginal
Strategic
Executive priorities for managing diversity
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Cross-Cultural Management
High
Proactive
Accommodative
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Deny an assignment to an employee
because a client might object to the
employee’s nationality, race, gender,
age, etc.
Defensive
Systemic
Pressures for Diversity
Strategic responses for managing diversity
Freestanding
Low
Episodic
Diverse Structures
• Hierarchical
– Export office to functional to divisional to
hybrids
• Internal horizontal
– Networks, shamrocks, matrix, virtual
• Interorganizational
– Joint ventures
– Strategic alliances
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Cross-Cultural Management
Diverse Processes
• IT—integration depends on infrastructures that
vary
• HR—selection, development, and compensation
in different nations and regions
• Labor practices and conditions
• Social responsibility and ethics initiatives
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Cross-Cultural Management