CrossCultural Management

Cross Cultural Management

 

Week 1 – Lecture 1 & Chapter 1 + 2

 

Chapter 1 The Challenging Role of the Global Manager

Dramatic shifts in economics, politics and technology shape the role of the international management. à Globalization

Various definitions of globalization.

Globalization = a process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration/unity worldwide; others do not.

This increase in interconnections is the result of shifts that have taken place in technological, political and economic spheres.

The following four categories of change illustrate the process of globalization:

  1. Growing Economic Interconnectedness
  • The economic interconnections among countries were dramatically increased with the advent of free-trade areas in the 1990s.
  • The result of these agreements is to create a greater degree of interconnectedness among the world’s economies
  • Therefore, local economic conditions are no longer the result of purely domestic influence
  • The gap between regional GDP growth rates of the fastest growing and least dynamic regions of the world has begun to narrow, but in a context of low global growth. The GDP growth rates of the BRIC countries have all declined substantially between 2010 and 2014.
  • The level of foreign direct investment (FDI) also has a globalizing effect. FDI doubled between 1997 and 2014.
  • Global economic turmoil during the past decade indicates that the effects of globalization not only have the potential to favour developed market economies and small number of large emerging economies but are not even consistently positive in developed economies.
  • Organizational boundaries are also affected by globalization. In modern corporations production, sales, marketing and distribution might all be located in a different country to capitalize on certain location-specific advantages.
  • Less hierarchical relationships and cooperative strategic alliances with other firms
  • Emergence of virtual organization
  • Thus economic globalization connects countries and organizations in a network of international linkages that shape the environment in which global managers must function.

     

  1. More Complex and Dynamic Work Environment
  • Changes that affect the stability of the work environment within organizations: downsizing, privatization and movement toward team-based management
  • The number of permanent migrant is changing the composition of the workforce in numerous countries. Migration resulting from economic, political and social factors increase.
  • Trends in migration: (1) 2014: war refugees from Syria, Afghanistan, Somalia. (2) number of women migrants has expanded and contracted. (3) Today’s migrants are much more likely to be highly skilled
  • Privatization enables formerly government-controlled enterprises to be available for purchase by foreign firms, thus reducing boundaries.
  • Organizations around the globe are increasingly looking toward the formation of teams of workers as a solution to productivity problems.
  • Thus, these changes contribute to create a more complex and dynamic work environment for firms around the world.
  1. Increased Use and Sophistication of Information Technology
  • The most significant force toward globalization, the one with the most potential to shape the international management landscape, might be the dramatic advances in information technology.
  • The likely effect is that the work roles of employees and managers will need to be adjusted to reflect an increasingly information-driven environment.
  1. More and Different Players on the Globe Stage
  • The number of new entrants to the international arena in recent years increased.
  • Most rapid expansion of international business occurred in the latter half of the 20th century
  • Technology has facilitated the entry of small business into the international arena.
  • Transnational crime and terrorist groups. Imporvements in transportation, telecommunications and international finance have promoted the activities of these groups. The international activities of the two groups overlap and often aid one another.
  • One key result of globalization is that global managers face an external environment far more complex, more dynamic, more uncertain and more competitive than ever before.  

 

The elements of the global manager’s environment can be divided into four categories: economic, legal, political and cultural.

Economic legal and political aspects of the global business environment provide the backdrop against which global managers must function.

Culture is singled out as uniquely important to international management for three reasons:

  1. To a great extent, the economic, legal and political characteristics of a country are a manifestation of a nation’s culture. These systems are derived from a country’s culture and history.
  2. Culture is largely invisible. The influence of culture is difficult to detect. Managers therefore often overlook it.
  3. One of the distinct characteristics of global management is that interpersonal interactions occur with individuals who are culturally different.

How Global Managers Carry Out Their Role: Sources of Guidance

Own judgement shaped by their experience and training.

Also rely on other people, their role set and norms.

Role set members= colleagues, superiors and subordinates as well as staff departments, internal and external consultants and sometimes even friends and family members

Norms = explicit organizational rules and procedures as well as governmental laws and also implicit norms about “how we do things around here” that are well known and typically followed in an organization or society.

Being aware of the sources that organization members tend to rely on most heavily in a particular part of the world can inform an international manager about the ways of having a constructive influence in an unfamiliar society.

 

Organizational Context, Culture and Managerial Roles

The practice of management is anything but static. As globalization increases the amount of intercultural contact in organizational settings, the inadequacy of our present understanding of management to explain and predict behaviour in these settings becomes more apparent.

 

Types of International Management Research:

Methodological Issues in Cross-Cultural Research

Studies that involve two or more cultures share several common methodological issues that are not present in purely domestic research. These are discussed under the broad headings of equivalence, sampling and data collection.

Equivalence à most important issue. Cross-cultural equivalence cannot be assumed at any stage of a cross-cultural study. In fact, it must be established at three key points: conceptualization of the theoretical constructs, the study design and the data analysis.

Conceptual or construct equivalence à extent to which concepts have the same meaning in different countries. The involvement of researchers from different cultures in the development of a study is one indication that thought was given to the need for conceptual equivalence.

Method equivalence à similarities and differences in the way to which the cultural groups being studied respond to measurement instruments in general. Acquiescence = tendency for some cultural groups to (dis)agree with all or most questions asked. Extremity bias = extent to which cultural groups systematically choose the extreme points or the middle points on a rating scales.

Metric equivalence à extent that questions have similar measurement properties across different groups.

Sampling  à conduct research with a small number of participants who accurately represent a clearly identifiable population.

Data collection à Questionnaires most common quantitative method, interviews most common qualitative method.

 

Critiques of International and Cross-Cultural Research:

  • Questionable theoretical base
  • Parochialism: culture is often ignored in management research, and what are really domestic conclusions are assumed to be universal.
  • Samples that assume country homogeneity
  • Lack of relevance
  • Reliance on a single method
  • Bias toward studying large companies
  • Reliance on a single organizational level
  • Limited to a small number of locations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 2 Describing Culture: what it is and where it comes from

Three characteristics of culture; shared, transmitted between generations and systematic + organized.

Culture is shared

Culture is something shared by members of a particular group. Shared in this case that most members intuitively understand the basic values, norms or logics that underlie what is acceptable in a society.

As shown in figure below, individuals carry in their mind three levels of programming about how they interact with their environment. At broadest level, all human beings share certain biologic reactions. At the narrowest level are the personality characteristics that are unique to each of us as individuals. Culture occurs at an intermediate level based on shared experiences within a particular society.

Individuals living in a society have very little personal choice about whether or not they are thoroughly familiar with the central cultural values and norms of their society. Individuals can differ quite widely in what they personally like and dislike about their society’s cultural characteristics.

Culture is a collective phenomenon that is about elements of our mental programming that we share with others in a society.

Culture is learned

Culture is transmitted through the process of learning and interacting with the social environment. Learning through stories implies not only that children can learn about their own culture but also that it is possible to learn about the cultural patterns of another society. However, some aspects of an unfamiliar culture are likely to seem strange.

Culture is systematic and organized

Cultures are integrated coherent systems. It is an organized system of values, attitudes, beliefs and behavioural meanings related to each other, to a cultural group’s physical environment and to other cultural groups.

 

Culture = set of knowledge structures consisting of systems of values, norms, attitudes, beliefs and behavioural meanings that are shared by members of a social group and embedded in its institutions and that are learned from previous generations.

 

Three levels of culture: artifacts and creations, values and basic assumptions. Above surface are cultural artifacts, which include all the visible features of a culture, such as architecture of its physical environment, language, technology, clothing, manners, etc. Just below the surface are the espoused values of the culture à these values are consciously held in the sens that they are explanations for the observable features of culture. Deep below surface are underlying assumptions shared by the culture, which are the ultimate source of values and action. These basic ways of structuring reactions to the world shape, beliefs, perceptions, thoughts and feelings at an unconscious level are taken for granted by members of a cultural group.

 

Assumptions about a society’s interactions with the environment:

  • There are a limited number of common human problems for which all people at all times must find solutions.
  • There are a limited number of alternatives for dealing with these problems
  • All alternatives are present in a society at all times, but some are preferred over others
  • Each society has a dominant profile or value orientation but also has numerous variations or alternative profiles
  • In both the dominant profile and the variations, there is a rank order preference for alternatives
  • In societies undergoing change, the ordering of preferences may not be clear

 

Survival (and the emerge of social institutions)

Many cultural characteristics originally developed to aid the survival of groups in their environments. Ways of dealing with societal problems come to built into a society’s institutions. Institutions = the structures and activities that provide stability to a society; they consist of the family, education, economics, religious and political systems.

Once a cultural pattern is established, it is very resistant to change, even when surrounding circumstances change.

 

Language

Language plays a particularly prominent role in the way cultural characteristics have spread throughout the world and how they are maintained within a society. Because we use language to interact with others, it has a powerful role in shaping behaviour and in perpetuating beliefs and habitual patterns of interaction, hence, culture.

 

 

Religion and ideology

Religion and ideologies reflect beliefs and behaviours shared by groups of people that cannot be verified by scientific test. Religion traditions are closely related to cultural values.

 

Other factors

Numerous other factors can be suggested as contributors to cultural variation and persistence. For example, the following:

  • Climate, topography and the indigenous economy affect traditions and behaviour in the primitive heritage of modern societies
  • Proximity and topography affect the exchange of culture among societies, because barriers, such as mountains and oceans, limit the potential for cross-cultural interaction
  • Economic systems and technology affect the exchange between cultures and hence the transfer of culture
  • Political boundaries define areas where there is more or less interaction among cultures.

 

Debates about culture

A number of debates regarding culture have emerged in the literature. These issues are the concept of a notional culture, the convergence or divergence of cultures, the concept of an organizational culture and the effects of acculturation.

National culture

A key question to identifying culture, so that its effect on management can be assessed, is the extent to which a nation has a distinctive culture. The dynamic between cultural fragmentation and national unity raises the question of the appropriateness of the concept of a national culture.

Convergence, divergence or equilibrium

An additional consideration to identifying culture is the extent to which cultures around the world are becoming more similar or more different.

The argument for convergence of cultures hinges on the fact that nations are not static entities but develop over time. Despite the logic of arguments in favour of cultural convergence, upon close examination they are somewhat compelling (more at p.33). A final perspective: Cohen argues that, while different environments produce different social systems, different environments can produce similar systems and similar environments can produce vastly different cultures.

The implication of considering these multiple explanations for culture is that, once cultural characteristics have emerged in a society, their stability and change is not determined by anyone of these influences but by a combination that includes some forces that promote stability and others that promote change.

 

 

 

 

 

 

 

 

Organizational versus National Culture

Organizational culture is somewhat different construct and is composed of different elements than is national culture. In addition, entry to and transmittal of organizational culture occur in different ways and at different times from national culture. Moreover, individuals are only partly involved with an organizational culture as compared norms must be considered in concert with societal culture in understanding the causes of behaviour in organizations.

Acculturation and biculturalism

Acculturation = the psychological and behavioural changes that occur in people because of contact with different cultures. Most often, it is used to describe the changes in people who relocate from one culture to another. Acculturation can also occur on a larger collective scale. In collective acculturation the whole group as opposed to the individual changes. One way that cultures change is through the process of acculturation, as large groups migrate from one society to another and mutual adjustment occurs. The acculturation patterns of individuals and groups can be influenced by a number of individual difference and situational factors.

Bi-cultural individual = have through time living in another culture or through intensive daily interaction with culturally different others, developed cultural flexibility so that they can adjust their behaviour based on the cultural context of the situation.

 

Culture and social groups

A key aspect of culture is that culture is associated with a specific group of people. Identifying ourselves with a particular social group places boundaries around our group (in-group) and defines non-members as out-group. The in/out – group distinction à useful in describing attitudes and behaviour both within and across cultural-group boundaries. An important premise is that identifying a social group serves no purpose if no one is excluded from the group. That is, groups are about differentiation.

 

In-group bias and prejudice

The universal bias in favour of one’s own group is related to the role of our cultural group in defining who we are. We derive our sense of self, in part, from our identification with the groups to which we belong, including our cultural group. To maintain our self-image, we favourably compare the attributes of our own group with those of out-groups. Therefore, we consistently discriminate in favour of the groups with which we identify. Prejudicial judgements about members of out-groups relate to beliefs about the character of these groups.

 

 

 

Ethnocentrism

Ethnocentrism = an attitude that one’s own cultural group is the center of everything and all other groups are evaluated with reference to it. Characteristic of ethnocentrism:

  • What goes on in our culture is seen as ‘natural and correct’, and what goes on in other cultures is perceived as ‘unnatural and incorrect’.
  • We perceive our own in-group customs as universally valid
  • We unquestionably think that in-group norms, roles and values are correct
  • We believe that it is natural to help and cooperate with members of our in-groups, to favour our in-group, to feel proud of our in-group, and to be distrustful of and even hostile towards out-group members.

 

Lecture 1 Cross Cultural Management

 

Cross-cultural management à within these function, increased cross-border variety redefines existing managerial activities and introduces new managerial issues. For instance: who will be in charge of subsidiary X in country Y? How to manage multicultural teams? Etc.

 

Culture concept. The more people start crossing borders, the more they are confronted with cultural differences between groups of people.

Culture as a social force. The forces of culture run deep and far in a society.

 

Culture has multiple definitions:

  • Ruth Benedict (1934): “Each culture selects or chooses from the infinite variety of behavioural possibilities a limited segment which sometimes conforms to a configuration.”
  • Kroeber and Parsons (1958): “Transmitted and created content and patterns of values, ideas and other symbolic-meaningful systems as factors in the shaping of human behaviour.”
  • Kluckhohn (1951): “Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments in artefacts; the essential core of culture consists of traditional (e.g. historically derived and selected) ideas and especially their attached values.” à widely accepted definition
  • Deal and Kennedy (1982): “The way we do things around here.”
  • Hofstede (2001): “Culture is shared mental software, the collective programming of the mind, that distinguishes the members of one group or category of people from another.”

Two approaches:

  1. Collective focus à Cultural anthropology / sociology
  2. Individual focus à Psychology

 

Variety of behavioural possibilities. Cultures ‘cover’ a particular set of these possibilities which makes them different from other cultures. Cultures are ‘created’ and ‘transmitted’.

Individual level: think, feel, chose, behave, decide.

Collective level: symbols, artefacts, believes, ideas, norms, values, value systems.

Historically rooted and path dependent.

 

Essential functions of culture: in general.

  • Individual level:
  • Reduction of information overload: simplifying the world around us.
    - Example of words/categories: chair/cook/manager/employee/business meeting
  • Develop an identity: creates safety by delineating group membership.
    - Example: national identities, regional identities, corporate identities.
  • Collective / Societal level:
  • Decrease transaction costs in individual encounters.
    - Example: ‘a man a man, a word a word’. American versus Dutch contracts.
  • Solve collective good problems.

- Example: who can make which decision in a hierarchy?

 

Essential functions of culture: in more detail.

Problem of human beings: information overload: ‘People are inundated by so much information from their environment that they find it impossible to cope with it all’

Solution:
- Individual level à develop cognitive structurers to help them organize and process information efficiently

- Collective level à shared cognitive structures are even more efficient.

 

Psychology: cognitive structures consist of schemas and script (book 64-70)

 

Schemas = People use ‘categories’ or ‘schemas’ which determine how we see their environment. These schemas serve as ‘cognitive maps’ which contain a ‘definition of the situation’.

  • Develop over time
  • Through repeated experiences with objects, persons, and/or situations
  • But are also learned when individuals are socialized during their formative years.

 

Features of schemes:

  • Prototypes = these represent the essential characteristics
    - Example: ‘a chair is a thing with one or more legs that is meant to sit on’
  • Constraint value = range of the levels of a specific schema
    - Example: ‘how tall is a tall leader? How black should Zwarte Piet be?’
  • Default values = essential values of schemas

- Example: putting it in one schema, and taking it back

  • Vertical and horizontal levels:
    - Vertical: from leaders to supervisors
    - Horizontal: political, religious, business and military and so on

 

Schemas about other cultural groups are ‘stereotypes’.

Stereotype = a thought that may be adopted about specific types of individuals or certain ways of doing things, but that belief may or may not accurately reflect reality.

Conclusion about schemas: Schemas help reduce information overload, but might be incorrect.

 

‘Thomas theorem’ applies ‘If men define situations as real, they are real in their consequences.’ à 1973, toilet paper panic; end result was ... self-fullfilling prophecy.

 

Intriguing social process: with potentially dangerous consequences.
Do you trust your bank? Bank run as a modern example. Bank run in 1930’s in the Us during the Great Depression & Bank run in 2007 in the UK.

 

Besides schemas, we have scripts

Script = is a schema that contains information about the sequences of behaviour appropriate to particular situations.
- Etiquettes: completely cultural defined.

  • Scripts are strongly determined by cultural dimensions. For an individual, ‘what to do when’ is often rather normative, and an externally given social fact.
  • Examples: think about business meeting
  • Adjusting old schemas and scripts and creating new ones: a process of acculturation

 

Intercultural problems: an issue of schemas and scripts

  • Occur between managers and subordinates from different cultures due to basic differences in how the individuals collect, process, store and use information about one another’s behaviour
  • In the context of cross cultural management, three issues:
  1. Differences in content of schemas and scripts
  2. Differences in structure of schemas
  3. Differences in automatic versus controlled categorization of new information
  • Schemas and scripts are a nice conceptual basis for the CCM Course:
    - On an individual level: it is cognitive base to understand differences
    - But not completely satisfactory on the collective level.

 

Studying (cross-) cultural issues

Difference 1: endogenous or exogenous character of culture
Endogenous à Character which has an internal cause of origin
Exogenous
à Character which has an external cause of origin 

  • Micro perspective: psychology
  • Individuals develop schemas in a world without context
  • Schemas are endogenous:
    - For instance: a person can be labelled ‘leader’ based on observations and will give this person ‘social power and influence’.
  • Macro perspective: sociology / anthropology
  • Cultures are a social fact in the context you are raised. Individuals are socialized by them and these are internalized.
  • Schemas are –to a large extend- exogenous
    - ‘manager’ is a position, and as such, a schema
    - people are assigned to management positions which makes them ‘managers’

- that does not make them ‘leaders’

 

 

 

Difference 2: detailed versus wider perspective

  • Micro perspective: psychology
  • Cognitive perspective is reductionistic à the practice of analysing and describing a complex phenomenon in terms of its simple or fundamental constituents, especially when this is said to provide a sufficient explanation.
  • Focus more on isolated issues which are separated from wider context
  • Macro perspective: sociology / anthropology
  • Cultures are ‘meaning-systems’ on a collective level
  • Suggests a large set of schemas and scripts which together create a coherent worldview that is shared with others

Difference 3: stimuli versus disciplining

  • Micro perspective: psychology
  • Individuals are central and –relatively- isolated from their context
  • Respond to outside stimuli which explains individual differences and behaviour
  • Macro perspective: sociology / anthropology
  • Collective level is central. Study the context of individuals
  • They offer a way to interpret reality in terms of ‘meaning-systems’
  • They discipline individuals if they deviate from the norms and expectations. Self-enforcing systems, stronger than individuals.

 

 

 

Week 2 – Lecture 2 & Chapter 3 + 4

 

Chapter 3 Comparing Cultures: Systematically describing cultural differences

Kluckhohn and Strodtbeck framework

Societies place different emphases on three alternative ways of handling each of these problems:

 

Variations

Relationship to nature – Environment

DominatioRen

Harmony

Subjugation (submit to nature)

Beliefs about human nature – Nature of people

Good

Mixed

Evil

Relationships among people – Responsibility

Individualistic

Group (collateral)

Hierarchical

Nature of human activity – Activity orientation

Being

Controlling (reflecting, thinking?)

Doing (achieving)

Conception of space

Private

Mixed

Public

Orientation to time

Past

Present

Future

 

 

 

 

 

 

Hofstede’s Study

Hofstede developed four dimensions to classify countries:

  1. Individualism – Collectivism
    Extent to which the self-identity of society’s members depends on individual characteristics or the characteristics of the groups to which the individual belongs on a permanent basis and the extent to which individual or group interests dominate.
  2. Power distance
    Extent that power differences are accepted and sanctioned in a society.
  3. Uncertainty Avoidance
    Extent to which societies focus on ways to reduce uncertainty and create stability.
  4. Masculinity – Femininity
    Extent to which traditional male orientations of ambition, acquisition and achievement are emphasized over traditional female orientations of nurturance and interpersonal harmony

Additional dimensions:

  1. Long Term Orientation
    Low importance on service to others, high importance on thrift and perseverance, economic growth.  
  2. Indulgence versus Restraint
    Indulgent societies have a relatively large proportion of citizens who say that they are very happy, believe that they are in control of their lives and place are very high importance on leisure. Higher birth-rates, less cardiovascular disease, higher importance of friends, more support for casual sex and more obesity.
    Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.

 

Schwartz Value Survey U

They conducted a series of studies about the content and structure of human values. The content of values refers to the criteria that people use to evaluate events and select courses of action. Structure refers to the organization of these values based on their similarities and differences. Three universal human requirements, issues: nature of relationships between individual and group, preservation of society itself, relationship of people to the natural world. Seven value orientations:

  • Egalitarianism:
    Recognition of people as moral equals
  • Harmony:
    Fitting in harmoniously with the environment
  • Embeddedness:
    People as embedded in the collective
  • Hierarchy:
    Unequal distribution of power is legitimate
  • Mastery:
    Exploitation of the natural or social environment
  • Affective autonomy:
    Pursuit of positive experiences
  • Intellectual autonomy:
    Independent pursuit of own ideas

Using these dimensions of national culture, they compared samples from 57 countries on this profile of values. Then, using a technique called a co-plot, they constructed a profile of differences between pairs of countries in the sample. This procedure generates a two-dimensional graphic representation of the relationship of countries to each other on all seven dimensions simultaneously.

 

Trompenaars’s Dimensions

His seven-value dimensions were derived primarily from the prior work of Kluckhohn & Strodtbeck and Parsons & Shils.
The first five of these dimensions concerned relationship among people:

  1. Universalism – Particularism
    Universalism is a belief that what is true and good can be discovered and applied universally, whereas particularism is a belief that unique circumstances determine what is right or good.
  2. Individualism – Collectivism
    Extent to which people plan their actions with reference to individual benefits versus those of the group.
  3. Neutral – Affective
    In neutral cultures, emotion should be held in check and maintaining an appearance of self-control is important, whereas in affective cultures, it is natural to express emotions.
  4. Specific – Diffuse
    Extent to which individuals are willing to allow access to their inner selves to others. In specific cultures, people separate the private part of their lives from the public, whereas in diffuse cultures, these aspects of the individual overlap.
  5. Achievement – Ascription
    How status and power are determined in a society. In an ascription society, status is based on who a person is, whereas in an achievement society, status is based on what a person does.

A subsequent analysis of Trompenaars’s data indicated that the five concepts about relationships among people reflected two main dimensions of cultural variation. These were the following:

  • Loyal involvement – Utilitarian involvement
    Representing varying orientations toward group members
  • Conservatism – Egalitarian commitment
    Representing orientations toward obligations of social relationships

These two dimensions can be seen as related to Hofstede’s indivudalism – collectivism and power distance dimensions, respectively.

 

 

 

 

 

 

 

 

 

The final two dimensions in the Trompenaars model are similar to Kluckhohn and Strodtbeck’s categorization:

  • Time
    Past versus Future orientations, but also with the extent to which time is viewed as linear versus holistic and integrative with past and present together with future possibilities
  • Environment
    Extent to which individuals feel that they themselves are the primary influence on their lives. Alternatively, the environment is seen as more powerful than they and people should strive to achieve harmony with it.

 

GLOBE Study

Global Leadership and Organizational Behaviour Effectiveness (GLOBE).

The first four GLOBE dimensions are the following:

  1. Institutional Collectivism
    The degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action
  2. In-group collectivism
    The degree to which individuals express pride, loyalty and cohesiveness in their organizations or families
  3. Power distance
    The degree to which individuals express power to be distributed equally
  4. Uncertainty avoidance
    The extent to which a society, organization or group relies on social norms, rules and procedures to alleviate unpredictability of future events. (GLOBE measure focuses more specifically on the use of explicit procedures to handle uncertainty than does its counterpart in the Hofstede scheme)

The next two dimensions can be seen as reconceptualizations of Hofstede’s masculinity-femininity dimension. They are the following:

  1. Gender egalitarianism
    The degree to which a collective minimizes gender inequality
  2. Assertiveness
    The degree to which individuals are assertive, confrontational and aggressive in their relationships with others

The next two dimensions have their origins in the work of Kluckhohn and Strodtbeck on the nature of people and time orientation presented previously and are as follows:

  1. Humane orientation
    The degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring and kind to others
  2. Future orientation
    The extent to which individuals engage in future-oriented behaviours, such as delayed gratification, planning and investing in the future.

The final dimension is derived from McClelland’s work on achievement motivation. However, linkages to Hofstede’s masculinity construct can also be found. This dimension is:

  1. Performance orientation
    The degree to which a collective encourages and rewards group members for performance improvement and excellence.

Individualism and collectivism

Individualism and collectivism are perhaps the most useful and certainly the most frequently studied dimensions of cultural variation in explaining a diverse array of social behaviour.

Individualism à tendency to view each person as independent of others and to be more concerned about the consequences of a person’s actions for that person alone.

Collectivism à tendency of a society to view people as interdependent with selected others who are part of stable groups. Collectivist societies tend to be concerned about the consequences of behaviour for each person’s reference group and expect people to be more willing to sacrifice personal interests for the good of their group.

 

However, individualism – collectivism should not be depicted as simply a dichotomy of self-interest and a generalied concern for everyone in the world. Collectivism does not equate with socialism.

 

Tightness and Looseness

An aspect of individualism – collectivism is the idea of cultural tightness and looseness. Individualism à looseness and complexity (example: US)

Collectivism à tightness and simplicity (example: Japan)
Tightness refers to the extent to which members of a culture agree about what is correct behaviour, believe they must behave exactly according to cultural norms and believe they will receive or should give certain criticism for even small deviations from cultural norms.

 

Vertical and Horizontal Dimensions

A number of other refinements of the individualism-collectivism concept have been suggested. Significant among these are the vertical and horizontal dimensions that relate to the way in which people view their status relationship with others. The vertical dimension is somewhat similar to Hofstede’s power distance dimension.

This table indicates how the different combinations of vertical and horizontal individualism and collectivism correspond to how societies tend to view their members, their value orientations on the Rokeach dimensions, their dominant political system and their typical patterns of social behaviour as defined by Fiske.

 

 

 

 

 

Social Axioms

In addition to considering values, researchers have recently proposed that general beliefs or social axioms provide a complementary way to understand societal cultures.
Social axioms are basic truths or premises or generalized expectancies that relate to a wide range of social behaviours across different contexts. Formal definition: social axioms are generalized beliefs about oneself, the social and physical environment or the spiritual world and are in the form of an assertion about the relationship between two entities or concept.

 

They identified many thousands of soial axioms. Based on their fit with the four categories of psychological attributes, orientation toward the social world, social interaction and the environment the items were reduced to 182 axioms. They derived a cultural level structure of social axioms. At the cultural level, one strong factor was labelled dynamic externality, focused around religiosity and belief that effort would ultimately lead to justice. Second factor labelled social cynicism was composed of items that reflected a cynical view of people – a negative view of human nature, biased view against some groups of people, mistrust of social institutions and disregard of ethical means of achieving an end.

 

Culture as sources of guidance

Another line of research seeks to understand cultural differences based on characteristics of the role structures typical in organizations in a society. This research considers the extent to which individuals in different nations rely on others in different roles and on rules and norms to deal with their daily work situations. Specifically, it analyses how societies differ in the extent to which managers consider eight sources of guidance for handling the work situations that they face. These sources are (1) organizations rules and procedures (2) their superiors (3) their colleagues (4) their subordinates (5) staff experts (6) their organization’s norms (7) their society’s norms (8) their own experience and training.

 

Cultural Distance

One of the benefits of quantitative measures of cultural dimensions is the ability to construct indexes of cultural distance between countries. This sort of an index draws an analogy with physical distance to consider how culturally different national cultures are from each other based on the value orientations measured.

 

Use of the frameworks

Much cross-cultural management research relies on overly simplistic models of the effect of culture. This oversimplification sometimes results in stating that people from this particular type of culture behave in this way, whereas those from that other type of culture behave in another way. In effect, cultural dimensions can be misused to construct so-called sophisticated stereotypes of a culture that are substituted for the complex reality that exist.

 

 

 

 

 

 

 

 

Chapter 4 How Culture Works: Fundamentals of cross-cultural interactions

 

Social cognition = explains how we develop mental representations and how our mental representations influence the way we process information about people and social events.

These representations are called schemas when they define a category or scripts when they contain a behavioural sequence. These cogniice structures are derived from our past experiences and are simple representations of the complex concepts that they represent. They help us reduce the complexity of our environment to a manageable number of categries.

In international management, we are most concerned with schemas that influence how people categorize one another, particularly regarding their culture.

Social cognition operates in two ways, often referred to as type 1 and type 2 cognition, which has implications for our intercultural relationships.

Type 1 social cognition à happens spontaneously with little or no conscious thoughts.

Type 2 social cognition à less automatic and requires more conscious thought than does Type 1.

Most of our behaviour is based on Type 1 cognition. Our capacity for engaging in Type 2 cognition is very limited and tiring. In intercultural situations that are new to us, such as arriving in an unfamiliar country, we are distracted by things around us that require our attention and thus require Type 2 cognition.

 

Cultural Schemas

Although we rarely become aware of them, schemas shape what people associate with everything from simple everyday aspects of life to social groups, such as a family and even to abstract ideas.

Self-schemas à characteristics that people associate with the inner self can include personally significant personality traits like competent, attractive, irritable or conscientious. Self-schemas also include memories associated with personal experiences that people see as having shaped who they are as individuals. Self-schemas are quire detailed. However, even self-schemas are simplifications.

People in all cultures develop an understanding of themselves as physically distinct and separate from others, but some characteristics of the inner self differ between societies in ways that influence cross-cultural interactions. Notable among these is the extent to which people regard themselves as independent or separate from others or as interdependent or connected with others.

Independent self-schema -à typical in western cultures in which people are expected to think and act as autonomous individuals with unique attributes. Person’s behaviour is expected to be organized and made meaningful based on the person’s own internal thoughts and feelings.

Interdependent self-schema à their individuality is less differentiated and more connected to a particular group of other people. Behaviour is influenced by contingent on and to a large extent organized by their perception of the thoughts, feelings and actions of others in some larger social unit. Typical of people raised in collectivist cultures.

Social identity = the total of the social categories that people use to describe themselves. Individuals differ in the relative importance of the different components of their social identity.

 

Cultural scripts and norms

Schemas and scripts influence each another. The categorization of one’s self and others into groups and identifying with a group influences the scripts that are applied. One result of identifying with a particular cultural group is consciously seeking to adopt its norms.
Cultural Norms  = are acceptable standards of behavioyr that are shared by members of our cultural group. Norms tell us what to expect from others and what is expected of us in certain situations.

Social groups only enforce norms if and when they perform one of the following functions:

    • Facilitate the group’s survival
    •  Increase the predictability of the group member’s behaviour
    • Reduce embarrassment for group members
    • Express the central values of the group – that is, clarify the groups identity

Therefore, an individual’s behaviour is influenced by the cultural norms of society, but only to the extent that a norm exists for a particular situation and for which societal sanctions for noncompliance exist.

 

Selective Perception

Perception = process by which individuals interpret the messages received from their senses and thereby give meaning to their environment.

Research on perception has consistently found that different people can be presented with the same stimulus and perceive it differently.

When we perceive people as opposed to objects or events, a key element of our perception is whether a person is categorized as a member of our in-group or an out-group member. A number of factors seem to influence the extent to which we categorize others as member of our group or not:

  • Certain category indicators may be universal indicators of group membership: race, gender
  • Distinctiveness of the category indicator against the social field may be a primary categorization factor if (e.g.) the number of distinctively different others is small
  • The extent to which a person is prototypical of a particular group influences categorization into that group. Atypical persons are harder to categorize.
  • Deviations from normal speech in terms of accent, syntax or grammar are particular salient cues for group membership.
  • History of interactions with another group will enhance the ability to categorize them.

An important effect of categorization of others as out-group members is that, once categorized, they are subsequently perceived as being more similar to each other than are in-group members We see the individual variation that occurs in our own cultural group but perceive other cultures as homogeneous. Selective perception also depends on the characteristics of what is being perceived.

Selective avoidance = when confronted with information contrary to our existing view we ‘tune it out’ by diverting our attention elsewhere.

Therefore, cultural differences can influence perception in several ways. First, our cultural socialization produces schemas that lead us to perceive things in a particular way. Second, we tend to have better recall of information inconsistent incompatible with our views. Finally, we perceive members of other cultures to be more similar to each other than members of our own cultural group.

Perceived similarity and attraction

The perceptual bias about our own versus other cultural groups has an additional implication for cross-cultural interactions. Perceptions of similarity lead to interpersonal attraction. Essentially, we are attracted to people whom we perceive to be similar to us, because this similarity validates our view of the world and the way it should be à consensual validation.

 

Stereotypic expectations

Stereotypes are closely related to the idea of schemas and are a categorization of the characteristics and behaviour of a set of individuals. Stereotypic expectations of a cultural group are a result of the natural cognitive process of social categorization.

National stereotypes à Early research on stereotypes indicated that people could hold intense stereotypes about other national cultures even though they had never met anyone from those cultures.

Resistance to new information à Once formed, these stereotypic expectations of others tend to become self-perpetuating. We reconstruct information about the social category (culture) to be consistent with our stereotype and behave toward members of the culture in ways that confirm our expectations. We may simple not notice information that is inconsistent with our stereotypes, but even when noticed, new information about a member of the culture is often discounted as not representative, thereby maintaining the stereotype.

Stereotype complexity and evaluation à Because stereotypes are learned we tend to have more complex stereotypes about social categories with which we have more familiarity. Therefore, more complex mental pictures (schemas) for our own culture than we do for other cultures. This complexity explains our expectation for more variability among people in our own culture than in others. New information about a social group for which we have a very simple stereotype is evaluated more extremely than for groups for which we have a more complex picture.

Social dominance theory = within every complex society, certain groups are dominant over others and enjoy a disproportionate amount of privilege. According to this idea, the extent to which my national group has high or low status will influence the attitude of others toward it and my attachment to it.

 

The usefulness of stereotypic expectations about members of another culture is thus limited by the following:

  • The extent to which these mental pictures contain accurate information
  • Our recognition that either positive or negative feelings about the cultural group are invariable attached to the stereotype
  • Our ability to adjust our expectations based on new information about the group

 

Differential attributions

Attribution helps us to understand and react to our environment by linking the observation of an event to its causes. Any number of causes might be assigned to behaviour we observe. Internally and externally caused behaviours. In order to attribute causes for behaviour, we rely on cues from the situation that indicate the extent to which individuals are in control.

 

 

 

 

Inconclusive information

Often, however, the situational cues that we rely on to make attributions are inconclusive. Sometimes we rely on information we already have about the individual to make a judgement. In cross-cultural interactions, we might rely on our stereotypic expectations of another culture to fill in the gaps. In other cases, we can project our own behaviour on the situation. In either case, cultural differences influence the attribution process.

Attribution error à Group-serving bias in attributions: we are more likely to attribute positive behaviour of members of our cultural group to their ability or effort, of members of out-group we are more likely to attribute it to luck or favourable circumstances.

Country-of-origin effect à biased belief systems about members of one’s own national culture are pervasive and extend (e.g) to favouritism for products coming from one’s own country.

Fundamental attribution error à the general tendency of people to attribute any behaviour to characteristics about the individual and underestimate the effects of the situation. This was consistent across cultures. However, this effect is much more difficult to find in Asian as compared to North American or European populations.

 

Cross-cultural interaction model

Starting point: some behaviour of a person from another culture. Situational cues: determine the extent to which the situation evokes a pre-existing behavioural sequence, a script (Type 1 cognition). If a script does not exist for the situation, the individual will give more thought (Type 2 cognition). Interpreting meaning of actions: Stage 1 à identification of behaviour. Can be influences by culturally biased selective perception. Categorizing the person. Stage 2 à attributing the behaviour to a cause. Influenced by the culturally based expectations. Finally, the perceiver’s attitude and behavioural response depend on attributions about the causes of the behaviour itself can be scripted.

Self-schemas and motivation

Motivation = involves the reasons that people take or persist in a particular action.

Cultural differences might be expected in motivation based on an individual’s internal representation of self. Although all people might be motivated by self-interest, a fundamental difference is the role that others play in how people define themselves. Individuals are differentially motivated depending on whether they view themselves as independent of or interdependent with others. In intercultural interactions, this motivational differences influences behaviour throughout the interaction sequence.

 

 

 

 

Lecture 2 Cross-Cultural Management

Why are cultures different?

  1. Cultural materialism: cultures are answers to specific environmental conditions. Systems-thinking.
    - Roots in sociology & anthropology
    - Ecological and environmental conditions determine cultural variety
    - Example: Dutch and Japanese corporatism (dikes and polders; rice fields)

- Example: beliefs in moralizing high gods are ore prevalent among societies that inhabit poorer environments and are more prone to ecological duress

  1. Evolutionary psychology: stresses cultural universals, looking for similarities. Kluchhohn and Strodtbeck (1961): 6 basic issues cultures have to deal with:
  • Relationships to nature: domination, subjugation, harmony
  • Believes about human nature: good or evil
  • Relationships between people: individual vs collective, collateral versus hierarchy
  • Nature of human activity: being, achieving, thinking
  • Conception of space: public versus private
  • Orientation of time: role of past, present and future

The underlying issues are the same, the answers vary per culture
Nice example: Hofstede’s work
Studies of cultural comparison thus compare the specific answers of different societies/groups on universal issues (dimensions)

 

How to study culture?

  1. Etic approach: start from the general
    - Outside perspective
    - Nomothetic (aimed at generalization)
  2. Emic approach: the specific
    - Inside perspective
    - Idiosyncratic (looking for the unique)

 

Etic study: Hofstede’s “Culture’s consequences”

  • Historical Background
  • Geert Hofstede did his famous study 1967-1973
  • Etic approach – survey questionnaire
  • Topic: employee commitment and satisfaction at IBM: culture was not the main purpose. Focus on ‘practices’, outcome were values.
  • Culture as a residue. For IBM disturbing, for Hofstede interesting
  • The base study
  • 40 countries (later 50, finally 76)
  • Questionnaires among 117,000 employees in IBM
  • Factor analyses on country level means – in search for underlying structures
  • Outcome: Four Dimensions:
  1. Power distance
  2. Individualism vs Collectivism
  3. Masculinity or Feminity
  4. Uncertainty Avoidance

Dimension 1: Power distance

“All societies contain inequalities, but some are more unequal than others”

Index scores of each nationality related to manager type:

1. Prompt decisions; communicated clearly & firmly” expects decisions are carried out loyally

2. Prompt decisions; fully explains them to subordinates; answers questions that may rise

3. Consults with subordinates first; listens & considers advice; makes decision and expects loyalty regardless of previous advice
4. Calls a meeting to discuss issue; tries to reach a consensus; consensus accepted as decision by manager.

 

Dimension 2: Individualism and Collectivism  

“Some societies are organized around individuals and others are based on strong cohesive in-groups”

Calculating the individualism index scores for each nationality. How import is it to you to:
1. Live in an area desirable to you and your family? (+)

2. Work with people who cooperate well with one another? (-)
3. Have good physical working conditions (ventilation, lighting, etc.) ? (-)

4. Have a job which leaves you sufficient time for your personal or family life? (+)

 

Dimension 3: Masculinity or Femininity

“Achievement and competition versus caring and life quality”

Calculating the masculinity index scores for each nationality based on these questions. How import is it to you to:

1. Have an opportunity for high earnings? (+)

2. Work with people who cooperate well with one another? (-)
3. Have the security to work with the company as long as you want to? (-)

4. Have an opportunity to advance to higher level jobs? (+)

- Number 1 in femininity: Sweden

- Gender equality policy (e.g. parental leave)
- But also: school culture

 

Dimension 4: Uncertainty Avoidance

“What is different is dangerous”

Calculating the uncertainty avoidance index scores for each nationality based on these questions:

1. How often do you feel nervous or tense at work? (+)

2. How long do you think you will continue working for this company? (+)

3. Company rules should not be broken – even when the employee thinks it is in the company’s best interests (+)

 

Hofstede Dimensions: Phase 2

  • Michael Bond expected dimensions to be euro-centric
  • Developed new questionnaire with Chinese scholars (1991)
  • Based on Chinese values and the heritage of Confucianism
  • And finds similar dimensions + plus new one

 

 

Dimension 5: Long Term Orientation

“(short term) normative versus (long term) pragmatic”

 

Hofstede Dimensions: Phase 3

  • Michael Minkov re-analyses old and new material (WVS), around 2010
  • Adds a sixth dimension....

 

Dimension 6: Indulgence versus Restraint

“Free gratification of basic and natural human drives (enjoying life and having fun) versus suppressing gratification of needs and regulating it through strict social norms”

Indulgence à Mostly in North and South America, Australia

Restraint à China, Russia, Europe

Strengths of Hofstede studies:

  • Sample: a ‘controlled experiment’ – specific group, same characteristics, nationality of respondents varies
  • Dimensions have face validity appeal to “users”
  • It is not the absolute scores that matter; the relative differences, they matter
  • Studied employees, not managers
  • Validated by other culture studies and over time
  • Gradually embedded in economic, organizational, sociological and anthropological theory
  • Data availability

 

Weaknesses of Hofstede studies:

  • Data from the 1970-1980s
  • Nations = cultures
  • Values – extracted from surveys on employee satisfaction and work practices
  • Set of dimension complete? Instrument not designed to find culture dimensions
  • Covering countries: complete cultural variety?
  • Sample & Generalization: IBM employees likely differ systematically from employees of other organizations or national populations
  • Statistics: analysed country level differences in factor analyses
  • Outcomes are:
    - dependent on the statistical technique (individual vs country level analyses)
    - Reinterpreted over time (new dimensions, renaming of a dimension)

 

Etic approach: Danger of stereotyping

  • Ecological fallacy (see Hofstede chapter reader)
  • Stereotype: “A fixed notion about persons in a certain category, with no distinctions made among individuals”

 

Stereotypes

  • Stereotypes are thus generalizations: a mental help to structure information
  • Different processes for perception of
    - other cultures (outgroup judgement)
    - own culture (ingroup judgement)
  • Not only description, also evaluation

 

Stereotypes: ingroup-outgroup

  • Dimension “tight – loose behaviour”
  • Judgements about:
  • Descriptive agreement, but mostly more favourable ingroup evaluations ( = ethnocentrism – superiority of ingroup)
  • Ultimate attribution error
  • Ingroup: conscious experience, but
    Outgroup: observed behaviour
    - Leads to exaggeration of outgroup homogeneity
    - Outgroup judgements change more slowly

 

GLOBE Study:

Global Leadership and Organizational Behaviour Effectiveness
Robert House and Colleagues

What did GLOBE do?

  • Worldwide study on variations in organization behaviour and leadership style
  • 62 countries, 951 organizations, 17.000 respondents
  • Collected between 1994-1997
  • 9 dimensions of cultural variation
  • Started from theory: aiming to measure (all potential cultural dimensions

 

2 types of questions:

Organizational situations:

  • “as is”
  • “as should be”

The economic system in this country is designed to maximize / should be designed to maximize. (from 1 ‘individual interests’ – to 7 ‘collective interests’)

Practices and values often found to correlate negatively!

 

 

 

 

 

 

 

Globe versus Hofstede: Matching Dimensions?

 

Trompenaars 7 Dimensions; 7 Dilemmas:

  • Class self-test:
    - Dilemma 1: “Who would not paint my house?”
    High: Sweden. Low: China
    - Dilemma 2: “Who receives the blame?”
    High: Russia. Low: Indonesia
    - Dilemma 3: “The car and the predestrian – who would not lie in court to save a friend?”
    High: Canada. Low: Venezuela
  • Translated to business:
    - Canadians about Venezuelans: “You cannot trust them because they only protect their friends”
    - Venezuelans about Canadians: “You cannot trust them because they do not even protect their friends”

Other culture classifications:

  • High versus low context cultures, Edward Hall (1976)
    - Focus on communication
  • Schwartz Value Survey
    - Based on psychological theory
    - Three main dimensions: embeddedness vs. autonomy; hierarchy vs. egalitarianism; mastery vs. harmony
  • World Values Survey (WVS) – also EVS (e.g. Inglehart)

(See also the course literature for other examples)

 

 

 

 

 

 

 

 

 

 

Week 3 – Lecture 3

 

Lecture 3 Cross-Cultural Management

 

Organizational culture = a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration. Or simply: the way we do things around here.

 

A person’s identity is a mix between different cultural experience

Progressive socialisations occurring during a person’s life:

Three levels of culture (Schein):

Cultural Dimensions at organizational level:

Practices, not values:

  • Process oriented vs result oriented
  • Employee oriented vs job oriented
  • Parochial vs professional
  • Open vs closed
  • Loose vs tight control
  • Normative vs pragmatic

 

Organizational cultural differences especially visible during mergers and acquisitions.

Bim Bensdorp, Head of Strategy Koninklijke Hoogovens in the 1990s, about mergers and acquisitions:

  • Between half and three quarter fail
  • Internal causes more important than external
  • Main risk: no cultural fit
  • Culture factor: poorly researched, much underestimated!
  • Culture sometimes an ‘excuse’

 

Phases of the integration process:

Pre-merger until D-day: closed and open phase

Post-merger : transition, integration

 

Focus of top management: ‘the wedding party’, not the ‘marriage’

 

Bim Bensdorp: Pitfalls in M&As:

  • It takes 100 days to get the job done!
  • Speed/decisiveness is okay when dealing with organizational/operational integration
  • But cultural integration may take 1000 days or many more

 

Famous example: Daimler Chrysler (1998-2007)

  • Perfect storm: chronic overcapacity, retail revolution, wave of environmental concerns.
  • Largest transnational merger: 440.000 employees, $100 billion market value in 1998
  • CEO of Daimler: ‘A merger of equals, a merger of growth and a merger of unprecedented strength’
  • ‘There was a remarkable meeting of minds at the senior level, there was no cultural clash’

(different Schemas)

 

 

 

 

 

Dutch Culture: What is it about and where does it come from?

1. Culture – the big C
“meaningful artefacts made by humans, often to relive history or for reasons of plain beauty” (Nachtwacht, Van Gogh, Dutch DJs)

2. Culture – the small c
“local customs and traditions people enjoy in particular regions and countries” (ice skating, eating herring, celebrating Kingsday, etc)

3. What is Dutch Culture about and where does it come from?

 

But there are also things you do not really notice yourself about your own culture.

Research (2013, NBTC): 11.000 respondents in 13 countries see The Netherlands as: tolerant, hospital, open and friendly, and they think of tulips, mills and cheese.

 

 

 

Where does the Dutch culture come from?

Four important issues:

  1. Issue: living in a delta: relationship with water
  2. Issue: Dutch independence from King of Spain Philip II
  3. Issue 3: Protestantism, Calvinism and the Pillarisation (to each, his own)
  4. Issue: Trading, open borders

 

Issue 1: Problem of living in Delta:

  • ‘The sea gives and the sea takes’
  • `God made the world, but the Dutch made the Netherlands’
  • Even after centuries, the contest between the Dutch and the water is, at best, a draw.
  • Watersnoodsramp 1953

What does it mean for Dutch Culture?

  • When the water comes, we are all the same
  • Social background does not matter, you cannot protect yourself. High dependency between people.
  • Close cooperation is necessary between everyone involved
  • Collective good: yes/no problem. A dike protects you all ... or nobody
  • Two consequences:
  • Close cooperative system: Hoogheemraadschappen
  • Technological developments over time:
    - Engineering: engineering water systems, enormous technical developments over time
    - Social engineering: inclination to control/design society

 

“Hoogheemraadschappen”:

  • Powerful, but rather invisible institutions in charge of water systems – a state in the state
  • Independent of daily democratic structures, no politician can influence this for political reasons
  • Democratically chosen:
    - by land owners and property owners
    - have their own tax system
    - tax based on size of property, voting system not
  • Based on good organization and close cooperation
    - Clear designation of tasks and responsibilities
    - Detailed planning (of opening and closing sluices)
    - Careful maintenance according to fixed standards
    - Strict procedures for emergencies (discussions are put on the side, no time for disputes, all must pull together to fight the danger)

 

Example of social engineering à Noordoost Polder

 

Issue 2: Dutch independence from the King of Spain Philips II

  • 1568-1648: 80 year war with Spain (and many others btw)
    - Not against the king, but against his representatives (alva) and their policies (taxes)
  • Country moved from Roman Catholic to Protestant
    - Strong resentiments against power and wealth of Catholic Chruch (beeldenstorm)
  • Start of the Golden Age around 1600: Netherlands developed into a world power
  • Country run by civilians (regenten)
    - Hardly and nobility
    - Catholic church was rather weak

à Dutch National Anthem: Het Wilhelmus

Link to Renan...

  • A nation is a spiritual principle based on two things:
    - possession in common of a rich legacy of memories
    - presently, the desire to live together and the desire to continue to invest in the heritage that we have jointly received
  • Anthem shows:
    - shared history
    - Dutch nation is less inevitable then one might expect

 

 

 

 

 

 

 

 

 

 

 

Issue 3: Protestantism, Calvinism and ‘Pilarization’

  • Strong representation of protestant ethic:
    - with their direct link to god. (anthem)
    - success in life is a sign for success in the afterlife (but no reason to enjoy it now)
    - with thrift and hard work, you can build a castle
  • And a rather clear view on how to enjoy wealth:
    - let those who have abundance remember that they are surrounded with thorns and let them take great care not to be pricked by them (Calvinism)
  • Pillarization:
  • Variety of different groups had to live together: no big civil wars
  • Solution was a system in which each organizes its own affairs:
    - And is hardly bothered by the others: to each, his won (protestants, catholics, socialists, liberals)
  • Sounds like tolerance
  • Enormous effect on cultural and academic life in that era
  • System started to unravel 40 years ago but is still influencial
  • Tolerance and democracy and openness and progressive outlook
  • But, alternatively ‘this was a cold-weather God, keeping watch over a puritan society which confuses its indifference with tolerance’
  • Conclusion: interpretation of the same cultural characteristics depends on the background of the observer.

 

Issue 4: Trading and economic openness

  • Hanze Network: 14th century
  • VOC established in 1602, first MNE, state in the state
  • Colonial relations: NY, Suriname, Dutch Antilles, South Africa, but mainly Nederlands Indie (Dutch Indies or Indonesia)
  • Central hub in Europe/world in terms of transportation. Sea harbour Rotterdam.
  • Colonial relations?
  • West indies: large number of islands (case 3?)
    Variety of different groups. Differs a lot per island.
    - For instance: Curacao has a large black community because it used to be aslave trading island with a few large plantations. Aruba was a naval base and had some (very) limited mining
    - Different historical linkages can matter a lot. Dutch Antilles are part of Dutch Kingdom
    - Dutch laws, Dutch schooling system, Dutch language at school, Dutch cultural influence, but ... also a lot of Caribbean influences
  • Small island culture: relation issues are extremely important

 

 

 

 

 

 

 

 

Characteristics of the Dutch? (KIT & vd Horst)

  1. Egalitarian:
  • Act normal, that is crazy enough
  • No one should dominate
  • Consensus: a feasible compromise is the ultimate aim
  1. Utilitarian:
  • Fight the water, results count
  1. Organized:
  • Need to be on time
  • Diaries and planned meetings
  • Rules, procedures and clear responsibilities
  1. Trade-oriented
  • Fisherman, merchants and transport
  • Competition, but not to the death
  • Aversion of non-sense and a love for hard facts
  1. Privacy-minded
  • Reserved, avoid physical contact
  • Cautious with strangers
  • Respect privacy of others

 

Geert Hofstede, compares business related cultural aspects all over the world:
THE NETHERLANDS:

  1. a culture with a low power distance: hierarchy for convenience only, equal rights,
  2. a rather individualistic culture
  3. a rather feminine culture: a focus on the quality of life and caring for one another, don’t stand out in the crowd.
  4. a culture that dislikes uncertainty, and tries to ban it by making rules/organizing it.
  5. a culture with a rather short-term orientation, with strong social pressures to ‘keep up with the Joneses’, impatience to realize quick results, and a strong concern with establishing the Truth/ normative.
  6. A culture which is indulgent: follow and try to realize impulses with regard to enjoying their life. Positive, optimistic and leisure time is important.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Week 4 – Lecture 4 & Chapter 5,6+7

 

Chapter 5 The Manager as Decision-Maker: Cross-cultural dimensions of decision-making

 

Rational decision making

The study of managerial decision-making is typically divided into prescriptive approaches about what managers should do and descriptive approaches about what managers actually do. On the perspective side, the rational or optimizing model of decision-making is based on a set of assumptions about how a decision should be made. The goal of the rational decision-maker is to make an optimal choice between specific, clearly defined alternatives. In order to optimize a particular outcome, the rational model suggests that people must progress through six steps:

  1. Problem definition
  2. Identify decision criteria
  3. Weight the criteria
  4. Generate the alternatives
  5. Evaluate the alternatives
  6. Select optimal solution

 

Cultural differences in the optimization model

The rational model is best thought of as mainly being a prescriptive or normative approach that demonstrates how managerial decisions should be made. It is helpful to consider cultural variation in what managers in different societies actually do when they try to optimize. The identification and weighting of criteria can also be affected by culturally different cognitive orientations. Cultural variation can also be anticipated in the generation and evaluation of alternatives. Research also indicates cultural differences in the extent which people vary in the choice rules they use in making decisions. Finally, who makes the choice and how long the decision process takes can be culture bound.

 

Limits to rationality

The optimization model assumes that decision-makers can:

  • Accurately define the problem
  • Identify all decision criteria
  • Accurately weigh the criteria according to known preferences
  • Be aware of all available alternatives
  • Accurately access the implications of each alternative.

Individual judgement is restricted or bounded in its ability to be rational. These boundaries exist because decision-makers often must deal with incomplete information about the problem, the decision criteria, and even their own preferences. Decision-makers do many things automatically, without careful thought and can handle only a small portion of the information available to them. Their perceptions are also always biased.

Alternative model à satisficing model à they do not evaluate all possible alternatives but search for a solution that meets a minimally satisfactory set of criteria.

 

 

 

 

Cultural constraints on rationality  

The concept of rationality itself may be culture bound. Rationality or being motivated by self-interest might be defined differently depending on how individuals from different cultures define themselves as interdependent with others or independent from others.

Conflict model of decision making à suggests that decision makers use one of four decision styles to cope with psychological stress of making a decision:

  • Vigilance = pattern consisting of carefully collecting facts and considering alternatives
  • Complacency = either ignoring the decision completely or simply taking the first available course of action
  • Defensive avoidance = passing the decision off to someone else, putting off the decision or devaluing the importance of making a decision
  • Hypervigilance (panicking) = making hasty, ill-conceived decision.

International management decisions are complex and frequent. The concepts of bounded rationality and satisficing suggest that these managerial decisions will rarely conform to a rational model.

 

Heuristics

Heuristics = rules of thumb (cognitive tools) that people use to simplify decision-making. Heuristics can result in biases in making decisions, but the increased speed of decision-making and the omission of sometimes unreliable information often outweighs the loss in decision quality. The three general heuristics that are used to simplify decision-making are:

  • Availability
    Extent to which instances or occurrences of an event are readily brought to mind. It influences managers’ judgments of the frequency, probability or likely causes of that event. Because the availability heuristic is based on life experiences, cultural differences in judgments that result from availability are easily suggested.
  • Representativeness
    Managers’ assessment of the likelihood that an event will occur is influenced by how similar the occurrence is to their mental representation (stereotype) of similar experiences. They often ignore base rates in favour of how well a particular example matches their expectations. Related to representativeness is the confidence a decision-maker has in the correctness of the decision.
  • Anchoring and adjustment
    Managers often make a judgment by starting from some initial point and then adjusting to yield a final decision, as often occurs in intercultural negotiation. The initial point or anchor can come from the way a problem is framed, from historical or random information. Even when an anchor is absurd and people recognize it as such, their subsequent judgments are often very close to their starting point. Regardless of the initial anchor point, subsequent adjustments tend to be insufficient.

These three general heuristics represent ways in which managers tend to simplify the decision-making process. Can result in specific types of biases.

Manager simplify reality in predictable ways. Because managers from different cultures perceive and interpret the world differently, the ways in which they simplify complex realities will differ as well.

 

 

 

Motivational biases in decision-making

Many of decision choices managers make can be influenced by motivational biases. Biases in decision-making can be based on the differences in self-concepts. à interdependent self-concepts of decision-makers should be more influenced by motives that are social or refers to others. A culturally based difference might exist in the need for consistency in internal attitudes and external behaviour. A common decision bias relates to an unrealistically positive self-evaluation.

 

Selection and reward allocation decisions

Two common managerial decisions that are relevant in terms of cross-cultural interactions are selecting employees and allocating rewards. The variation in selection techniques is consistent with the suggestion that cultural differences influence the institutionalization of the selection process. Cultural variation in the specifications of job requirements used in recruiting is evident. Reward allocation decisions dealt with differences in perceptions of fairness in individualist and collectivist societies in relation to in-groups and out-groups. Reward allocation criteria include equity, equality, need and seniority. It is important to consider that societal-level cultural and economic factors as well as organizational norms influence rewards allocation in organizations.

 

Ethical dilemmas in decision-making

The decisions international managers make span cultural and geographic boundaries. As a result, the consensus about what is morally correct erodes in the face of differing values and norms.

Moral philosophies = set of principles used to decide what is right or wrong. Managers can be guided by one of several moral philosophies when making decisions that present an ethical dilemma. The main categories are:

  • Teleology/consequential models
    Focus on the outcomes or consequences of a decision to determine whether the decision is ethical. A key precept à utilitarianism = moral doctrine that we should always act to produce the greatest possible balance of good over harm for everyone affected by our decision.
  • Deontology/rule-based models
    Human beings have certain fundamental rights and a sense of duty to uphold these rights is the basis of ethical decision-making rather than a concern for consequences. Immanuel Kant. Individuals have the right to be treated as an entity unto themselves and not simply as a means to an end. Some behaviours exist that are never moral, even though they maximize utility.
  • Cultural relativism
    Moral concepts are legitimate only to the extent that they reflect the habits and attitudes of a given culture. Cultural relativism implies that one should not impose one’s own ethical or moral standards to others and that international decisions should be evaluated in the context of differences in legal, political and cultural systems. However, it also leaves open the opportunity to attribute a wide range of behaviour to cultural norms.

 

 

 

Cognitive moral development

An approach to understanding ethical decision-making that focuses on the mental determination of right and wrong based on values and social judgments. This model suggests that all people pass through stages of moral development and that ethical behaviour can be understood by identifying a person’s level of moral maturity.

The six stages of development:

Stages in the model relate to age-based stages in human development. Managers’ stage of cognitive moral development determines their mental process of deciding what is right or wrong. The table suggests that individual differences can influence the likelihood of people acting on the choice of what they believe to be ethical.

 

 

 

 

 

Managers approach an ethical dilemma with a particular level of cognitive moral development. However, decisions made in social context can be strongly influences by the situation. Initially of course, the cultural context has a direct effect on the identification of the ethical component of an issue. However, a person’s susceptibility to external influence is related to the stage of moral development, with people at lower levels more susceptible. Situational factors that might be proposed to influence the relationship between stage of moral development and ethical decision-making include such factors as the extent to which the environment specifies normative behaviour, whether the social referents in the situation are members of one’s in group or out group and the extent to which demands are placed on the decision-maker by people in authority.

 

 

Chapter 6 The Manager as Negotiator: Communicating and negotiating across cultures

 

Cross-cultural communication process

Communication = the act of transmitting messages including information about the nature of the relationship, to another person who interprets these messages and gives them meaning. Sender and receiver both play active role. For understanding of the message to occur, the sender and receiver must share a vast amount of common information called grounding. This is based on each individual’s field of previous experience but is updated moment by moment during the communication process.

Cross-culturaal communication is significantly more demanding than communicating in a single culture, because culturally different individuals have less common information. Cultural field = culturally based elements of a person’s background that influences communication.

The figure shows how the communication process involves the meaning that is to be transmitted, the sender, a channel through which the message is transmitted and the receiver. All these elements are embedded in their respective cultural fields. The effectiveness of the communication depends on minimizing the distortion that can occur at all the stages of the communication process.

The meaning of the message is grounded in the personal field of experience of the sender, which can affect how it is encoded. The symbols a person uses to express an idea vary with the cultural field. All the factors that influence the sender also influence the receiver.

 

Language

Language = symbolic code of communication consisting of a set of sounds with understood meanings and a set of rules for constructing messages. The meanings of words and the syntax for expressing ideas have culturally distinctive origins and cultural conventions control the features of language use. The diversity yof languages in the world means an important issue in cross-cultural communication is finding a common language that both parties can use to work effectively.

 

 

 

 

 

 

 

The use of a second language has a number of implications for cross-cultural communication:

  • Using a second language is less automatic and requires more deliberative thought
  • The greater the fluency of second-language speakers, the more likely they are to be seen as competent in other respects
  • First-language speakers in a cross-language interaction tend to respond to lower linguistic competency of their partner by modifying aspects of their speech, such as slowing rate of speech. This type of speech accommodation, foreign speak, can be perceived as patronizing and might not be well received.
  • First-language speaker is unable to recognize signals that indicate lack of understanding or does not work to create an environment in which it is acceptable to check for understanding.

 

Communication styles

Culturally based rules govern the style, conventions and practices of language usage. Many of these are related to the key value orientations of individualism and collectivism.

Explicit versus Implicit communication

One way in which cultural norms about communication style vary is in the degree to which they use language itself to communicate a message.

A high context communication à most information is either in the physical context or internalized in the person, very little is coded, explicit transmitted part of the message.

A low-context communication à mass of the message is vested in the explicit code.

Direct versus Indirect communication

Directness is associated with individualist cultures and indirectness with collectivist cultures. In collectivist cultures, politeness and a desire to avoid embarrassment often take precedence over truth, as truth is defined in individualist cultures. For collectivist, truth is not absolute but depends on the social situation.

Silence and Verbal overkill

Collectivist cultures value silence as a way of controlling the communication interaction, whereas individualist value talking in the same way. Silence might be thought of as an extreme form of high-context communication. Even among individualist cultures, the use of silence and talking can vary.

Use of praise

Cultural differences exist in how frequently praise is used, what is praised, and how people respond.

 

Other language considerations

To function effectively in cross-cultural communication, it is important to understand not only the formal structure of the language but also how it is used in certain social situations. We all have a large repertoire of language styles and registers that we adopt depending on the situation. Cultural rules about style and register vary. Most languages have nonstandard forms of usage, such as slang, which make understanding this process more difficult

Slang and Jargon

Slang = informal usage of language typically more playful or metaphorical and associated with a particular subgroup.

Jargon = like slang, is associated with a particular subgroup but is often very specialized or technical language of people engaged in a similar occupation or activity.

In both cases, these specialized forms of language can enhance communications for members of the group with which they are associated byt can be almost unintelligible for non-group members.

The use of slang or jargon has three implications for cross-cultural communication:

  • Number of possible variations in expression in any particular language group is greater
  • Nonstandard terms or usage might last for only a few years before disappearing, unless they are incorporated into standard form of language
  • Knowledge of a shared specialized language by culturally different individuals can enhance their communication ability to some extent

Euphemism

All cultures seem to have words that by tradition or convention are not often used publicly. These prohibited words are often handled by substituting a bland or less direct expression or euphemism. Obviously, an in-depth knowledge of another culture is needed to understand what topics can be referred to directly and which require a more indirect expression.

Idioms

Every language has unique ways of combining words to express a particular thought. Often, a particular phrase or construction differs from its literal meaning. This poses a particular problem for translation.

Proverbs and Maxims

Short sayings which express things that are obviously true in a particular culture and often advise people how they should behave. Can provide insight into some of a culture’s central values. Proverbs are often widely understood, if not followed, in a particular culture.

 

Language pragmatics

There are also several practical considerations to language usage:

Language accommodation

Speech accommodation = shifting one’s speech patterns to achieve greater language similarity.

Who will accommodate whom in an intercultural interaction can be complex and depends on the motives of the parties in the interaction, the identities of the parties and the situation itself. A key consideration is what is called the ethnolinguistic vitality of the language à language that has higher prestige and is widely used in the relevant institutions or settings is more likely to be adopted.

Stylistic accommodation

The idea that adapting one’s communication style to that of the other culture participant will help to bridge cultural distance and improve communication is based on the similarity – attraction hypothesis. Stylistic accommodation leads to perceptions of similarity, which in turn lead to positive attitudes toward the member of the other culture.

Language fluency

The degree of language fluency creates several problems for the second-language user that extend beyond the user’s ability. Higher degrees of language fluency can lead to the second-language user being perceived as having a higher competency in other areas. Foreign language use can have implications for the attitudes and behaviour of the second-language user.

 

 

Nonverbal communication

Nonverbal communications convey important messages and are produced more automatically than words. They include body movements and gestures, touching, facial expression, tone of voice, space usage, eye contact and even scent or smell. In cross-cultural communications, it is possible that people rely even more heavily on the nonverbal component. Nonverbal systems of communication have a significant amount of variation around the world. In general, two types of differences exist:

  • Same nonverbal behaviour can have very different meanings across cultures
  • Different nonverbal cues can be used to mean the same thing in different cultures

Tone of voice

Cultural norms ascribe different meanings to features and qualities of tone of voice. As in the interpretation of other behaviour across cultures, individuals often fall into the trap of using self-referent criteria in explaining tone of voice.

Proxemics

Proxemics= the way in which people use personal spae in their interactions with others. Because cultural norms influence the appropriateness of a particular spatial relationship what is an appropriate distance in one culture might seem unusual or even offensive in another. Cultures vary widely in the meaning associated with the various forms of touching and with who a touch whom and on what part of the body in what circumstances.

Body position and gestures

The way people position their body conveys information in all cultures. However, people learn which body position is appropriate in a given situation in the same way that they internalize other aspects of culture. Hand gestures used as substitute for words are called emblems. Because the hand can be configured in numerous ways and with great precision, the number of possible hand gestures is enormous. The same hand gesture can have different meanings in different parts of the world.

Facial expression

Key source of information, particularly about underlying emotional states, which seem to be closely linked to facial expression. The link between facial expressions and emotions is a direct one that operates without conscious thought. However, people often deliberately seek to override the linkage between their emotions and their facial expression. In this way, culture can influence facial expression.

Eye contact

All cultures use gaze (eye contact) in nonverbal communication. Both maintaining and avoiding eye contact communicate important messages. Societies have various norms regarding where and for how long one should look at another person during social interaction.

 

 

 

 

 

 

 

 

 

 

Negotiation and conflict resolution across cultures

Efforts to understand cross-cultural negotiation fall into one of three types:

  • Descriptive approaches
    The Graham four-stage model suggests that all business negotiations should proceed through four stages: (1) non-task sounding or relationship building (2) task-related exchange of information (3) persuasion (3) making concessions and reaching agreement. Three styles of persuasion: rational, affective and ideological. Culture also seems to influence the preference that individuals have for particular conflict resolution style. Culture also seems to influence the initial offers and concession patterns of negotiations. Other cross-cultural comparisons of negotiator behaviour include the influence of assertiveness on negotiator outcomes, effect of displaying anger on negotiation strategies across cultures and display of dominant nonverbal cues on cross-cultural negotiation. These descriptions are informative and indicate that negotiator behaviour is highly variable across cultures.  
  • Cultural dimensions approach
    Research that relates dimensions of culture, especially individualism-collectivism and power distance, to negotiation improves our ability to predict the effect of culture on how managers prefer to negotiate. A cultural dimension perspective can also help us to understand cultural differences in the negotiation process. Culture dimensions also relate to the outcomes of negotiation. Contextual differences can influence the extent to which culturally based preferences for negotiation behaviour is altered in cross-cultural interactions.
  • Holistic approach

Recognizes that negotiator behaviour can vary within the same culture, depending on the context of a negotiation and the people involved. One way in which the complex influence of culture and context on negotiation has been studied is by trying to understand negotiation through the metaphors that peopleuse to make sense of the process. Metaphors may be a useful tool in that they help negotiators understand their own culture and how it shapes the reality they impose on the negotiation situation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 7 The Manager As Leader: Motivation and leadership across cultures

 

Motivation across cultures

Motivation= willingness of individuals to exert effort toward a goal. The study of work motivation has often been divided into content theories and process theories.

Content theories à explain motivation as the needs that people seek to satisfy. Unsatisfied needs create tension that individuals are motivated to reduce through their behaviour.
Maslow (1954): needs motivate individuals in a sequential hierarchy from basic (physiological, safety, belongingness) to growth (self-esteem, self-actualization) needs. Systematic differences in need strength across cultures.

McClelland (1961): three needs of achievement, affiliation and power (dominance), which vary among individuals.

Process theories à explain the choices that people make about their behaviour.

Equity theory (Adams, 1965), Expectancy theory (Porter & Lawler, 1968), Goal setting theory (Locke & Latham, 1984).

Equity theory à recognizes that we all are aware of what we contribute and what we receive in return from our roles in work and in life and that we also compare this ratio of our inputs and outcomes with that of other people. There are motivational consequences if people experience an imbalance in which the ratio of their inputs to outcomes is perceived to be unfair compared to what other people receive. The application of equity theory across cultures has received mixed results.
An extension of equity theory: idea that some individuals are more equity sensitive than others. Equity sensitives = prefer to be in a condition of balance between inputs and outcomes they receive. Benevolents = more tolerant of situations in which they are under rewarded. Entitleds = experience less dissonance when over rewarded than when under rewarded.

Expectancy theory à suggests that motivation is result of combination of the expectation that effort (E) will lead to performance and that this performance will be instrumental (I) in reaching certain outcomes. It also recognizes that individuals can place different value (V) on any outcome. That is, Motivation = V x I x E. In this formulation, employees will only be motivated to put effort into their work if they (a) believe that if they work hard they will accomplish their task (b) believe that task accomplishment will lead to a reward by their employer (c) value the outcomes that they are offered.

Model of goal setting à involve the responses of individuals to the existence of goals and the manner in which the goals were set. The basic principles of goal setting are as follows: (a) specific difficult (but achievable) goals consistently lead to better performance than specific easy goals, general goals or no goals (b) goal setting is more effective when there is feedback showing progress toward the goal. Research with regard to cultural variation in goal setting has focused on the way in which commitment to goals is achieved, particularly the effect of participation in setting the goal.

 

Work goals

Individual work motivation is influenced by why people engage in work and what they value in their work. The interest that people show in different work goals in different societies is important for fine tuning organization reward practices, so that they will fit the priorities of employees in different societies.

 

Work centrality and organizational commitment

Another aspect of work motivation is the generalized degree to which work is central to one’s life. Cultural differences in work centrality were originally discussed a being about whether a country had a strong work ethic. More recently, the centrality of work in a society’s culture is separated from the explanations of the origins of societal work norms.

Commitment = a person’s sustained motivation to carry out a course of action or contribute to the well-being of some other person, group or organization. Commitment to an organization has three components: (1) emotional bonds (affective commitment), interest in continuing a relationship (continuance commitment) and having a sense of obligation (normative commitment).  The causes and consequences of commitment may also vary around the world. Societies and subcultural groups facing economic hardship may develop norms emphasizing continuance commitment.

 

Designing motivating jobs

Work/job design à initial focus was to improve worker efficiency more contemporary perspectives have focused on how the characteristics of the job affect worker motivation. Three approaches to job design emanating from three different cultures are present: the job characteristics model, sociotechnical systems and quality control circles.

Job characteristics model à most influential model of work design. Essentially the model suggests that any job can be defined in terms of the following five job characteristics:

  • Skill variety = consists of different activities requiring different abilities
  • Task identity = requires the completion of a whole and identifiable piece of work
  • Task significance = has a substantial effect on other people
  • Autonomy = has substantial freedom, independence and discretion
  • Feedback = activities of the job provide direct and clear information on performance

These characteristics combine to influence the psychological states that are critical to worker motivation. To be motivating, a job must be perceived as meaningful, the worker must feel responsible for the outcomes and the worker must know the actual results of work activities.

Example: United States

Sociotechnical systems à An approach to job design that was developed and applied in societies that emphasize social goals. This approach focuses on integrating the social and technical aspects of the work system. Individual workers are seen as part of a social system that must mesh with the technology of the workplace. Sociotechnical job designs almost always involve autonomous work groups, which have almost complete responsibility for a significant task.

Example: Northern Europe

Quality circle à based on the belief that workers understand their own work better than anyone else and can therefore contribute to its quality control activities. Quality circles are small groups that voluntarily and continuously conduct quality control activities.

Example: Japan

 

Leadership

Meaning and importance of leadership vary across cultures

 

 

 

Western leadership theory  

Leadership theory is often described as having progressed through four distinct periods, each with a dominant theoretical approach. These approaches are trait, behavioural, contingency and implicit theories, and culture plays a different role in each.

Trait theories à The inherent difficulty with predicting leadership success from their personality characteristics, coupled with the fact that these theories ignore both followers and the effects of differing situations, led researchers in other directions in research of explanations of leadership.

Behavioural theories à Deficiencies in trait theories first led researchers to shift their focus from what leaders are to what they actually do on the job. It also indicated a change in the assumption that leaders are born to the notion that leaders could be developed. A series of studies identified two dimensions of leader behaviour:

  • Initiating structure (production- or task-oriented) behaviours
    Leader behaviours as assigning tasks to subordinates, coordinating activities, emphasizing deadlines and evaluating subordinates; work.
  • Consideration (employee- or relationship-oriented) behaviours

Leader behaviour that showed concern for subordinates, such as showing regard for their feelings, respecting their ideas and being friendly and supportive.

It is very important in cross-cultural situations, that to be effective leaders, they must adapt their behaviour to the situation and the needs of their followers.

Contingency theories à developed in order to reconcile differences between the findings of behavioural studies of leadership. Fiedler’s contingency model à basic idea presented in this model is that a leader’s personality influences the leader’s behaviour style (task or relationship oriented) and that the situation moderates the relationship between the leader’s style and effectiveness.

Another significant development in respons to conflicting results from behavioural approaches was path-goal theory à designed to describe how leadership could influence different aspects of motivation described by expectancy theory. It identifies four leader behaviours and specifies a number of situational and follower characteristics that can increase or reduce the relationship of leader style to follower satisfaction and performance. An idea related to path-goal theory is that the attributes of situations and the characteristics of subordinates could enhance, neutralize or substitute for some leadership behaviours à leadership substitutes theory: characteristics of subordinates as professionalism, can act as substitutes for such leader behaviour as being directive, while actually enhancing the effect of other types of leader behaviour, such as being supportive.

Implicit theories à concerned with the way in which the sorts of scripts, schemas and other cognitive characteristics influence how subordinates perceive and react to a leader. This theory perspective suggests that followers develop mental representations or prototypes of leaders through exposure to social situations and interactions with others. Specific leader behaviours do not make a person a leader unless that person is perceived as a leader by followers.

 

 

 

 

 

Project GLOBE à the Global Leadership and Organization Behaviour Effectiveness research program is extension of implicit leadership theory. From their research six dimensions of leadership, described as culturally based, shared conceptions of leadership, were derived and compared across the 10 cultural clusters defined according to the GLOBE cultural dimensions:

  • Charismatic/value based
    Ability to inspire, motivate and expect high performance from others on the basis of firmly held core beliefs. Generally reported to facilitate leadership.
    High: Anglo countries. Low: Middle East
  • Team oriented
    Emphasizes team building and implementation of a common purpose or goal among team members. Generally reported to facilitate leadership.
    High: Latin America. Low: Middle East
  • Participative
    Reflects the degree to which managers involve others in making and implementing decisions. Reported to facilitate leadership but without significant differences across country clusters. High: Germanic Europe. Low: Middle East
  • Humane oriented
    Reflects supportive and considerate leadership, including compassion and generosity. Ranges from almost neutral in some societies to a moderate facilitator of leadership. High: South Asia. Low: Nordic Europe
  • Autonomous
    Independent and individualistic leadership. Ranges from impeding leadership to slightly facilitating. High: Eastern Europe. Low: Latin America
  • Self-protective
    Focuses on ensuring safety and security of the individual; self-centred and face saving. Generally reported to impede leadership.
    High: South Asia. Low: Nordic Europe

 

Non-Western theories of leadership

Performance-Maintenance theory à Descriptions of Japanese management practices abound. identifies four types of leadership based on two basic dimensions: performance and maintenance. These dimensions are viewed as functions that a leader needs to fulfil rather than as a specific set of behaviours that a leader needs to carry out. Performance dimension (P) = behaviour directed toward achieving group goals and includes pressure-type and planning-type behaviour. Pressure-type behaviour = supervisory behaviour regarding strict observance of regulations and pressure for production. Planning-type behaviour = planning and processing of work. The Maintenance dimension (M) = behaviour directed at maintaining individual well-being and preserving social relationship in a group. The P and M dimensions are concerned with behaviour as experienced by followers and can therefore differ according to the context in which the behaviour takes place.

Leadership in the Arab world à strongly influenced by the Islamic religion and tribal traditions as well as by contact with Western culture. Tribal influence: managers are expected to behave like fathers; protecting, caring, responsibility. The combination of these tribal norms with bureaucratic structures resulted in an authoriatarian and patriarchal approach o leadership à Sheikocracy: characterized by hierarchical authority, subordination of efficacy to human relations and personal connections and conformity to rules and regulations based on the personality and power of those who made them.
The combination of this leadership style with influences from Western management practices has produced a duality in Arab managers who want to be modern by adopting Western practices but simultaneously wish to maintain tradition.
Prophetic – caliphal model à typifies duality of relationships prevalent in Arab culture. Two distinctly different leadership types that can emerge to fill the leadership vacuum created by the lack of institutionalism prevalent in Arab society. Prophetic leader emerges to fill leadership vacuum. If such leader emerges, indicated by the ability to accomplish some great feat, he will garner feelings of love, unity of purpose and voluntary submission to authority by followers. However, if an ordinary or caliphal emerges, conflict and strife will result, and he must use coercion and fear in order to maintain his status as leader.

Paternalism à a hierarchical relationship between the leader and followers in which the leader, like a parent, provides direction in both the professional and private lives of subordinates in exchange for loyalty and defence. Based in traditional values of familism, Confucian ideology and feudalism. Five dimensions of paternalistic leadership:

  • Creating a familiar atmosphere at work
  • Establishing close and individualized relationships with subordinates
  • Involvement in non-work lives of subordinates
  • Expecting loyalty of subordinates
  • Expecting deference from subordinates

Paternalistic leadership as measured along these dimensions has been associated with positive employee attitudes in collectivistic and large power distance cultures.

 

Integrated cross-cultural model of leadership

The figure has as its basis a cognitive information processing approach to leadership. This approach is similar to the implicit theories presented previously in that the ability of the leader to influence others is largely dependent on presenting an image consistent with followers’ expectations of a leader. The three key elements of the theory – leader’s image, individual and group processes, and substitutes for leadership- are all affected by cultural variation. Culture is considered an all-encompassing or enveloping influence on leadership processes. Also the interpersonal interactions between leader and followers are subject to cultural influence. This model highlights one of the most important but rarely addressed aspects of leadership: the question of how to best manage the interaction between leaders and managers who are culturally different.

 

 

 

Implications for the practice of leadership

Despite the wide variation in models of leadership, a number of important implications for managers can be drawn from the preceding discussion.

Universal leadership functions

The general functions of leadership are probably universal across cultures. Leadership in a number of cultures is categorized as concerned with the task, with the relationship with members, or both. Besides, it seems that leaders in all cultures have certain characteristics or exhibit certain behaviours that allow them to be regarded as leaders by their followers.

Culture-specific leader behaviour

In general, research has indicated that the leadership styles across cultures are consistent with the dominant cultural values of the country. Regardless of whether a more traditional behavioural or newer implicit approach to understanding leadership is taken, it seems that differences in the cultural setting must be taken into account in determining who is likely to be perceived as a leader and what leader behaviour is most likely to be effective.

Situational moderators

The characteristics of the situation influence, to varying degrees, the extent to which leadership can make a difference.

 

 

Lecture 4 Cross Cultural Management

 

Limits to cross cultural management

Cross cultural management and the ‘clash of civilization’:

  • CCM assumes: cultural variation enriches life, but also potential source of (unnecessary) problems
  • CCM assumes: intentions of both parties are positive and build on mutual respect
  • CCM: build on the universal declaration of human rights
  • But what happens when intentions of one party are negative and intolerance prevails?

‘Paradox of Tolerance’ (Karl Popper, 1945): “Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, the tolerant will be destroyed and tolerance with them.”

 

Does culture matters for managers? – Example

  • Study by Cheris Shun-Ching Chan, University of Hongkong
  • Economic Sociology: combination of institutionalism and culturalism
  • QUESTION: Why has life insurance been far more popular in Taiwan than in

Hong Kong: (1) Strong economy, richer than UK (2) No social insurance: only poverty relief (3) Less than 30% of the private labour force is covered by retirement funds (4) Laissez-fair towards insurance market (5) Seems a good market, but (6) Life Insurance Premiums: 1.7% of GDP (7) policies/population = 52.9%

Taiwan: (1) Weaker economy: half of Hongkong (GDP per capita) (2) Comprehensive social insurance coverage (3) 90% of private labour force is covered (4) Protective towards insurance market (5) Seems a bad market, but (6) Life Insurance Premiums 4.8% of GDP (7) policies/population = 74%

  • ANSWER: It depends on how insurance companies handled ‘the taboo of premature death’.
  • The taboo: ‘Chinese cultural taboo on thinking and talking about premature death and fatal misfortune’ à Root can be traced to concepts of death in Confucianism, folk Buddhism and folk Taoism
  • Confucianism: avoids death in its teachings. The avoidance further mystifies and intensifies general fear related to the topic
  • Folk Buddhism: ‘cruel hell’ and a cold ‘dark world’ after death
  • Folk Taoism: ‘dying after living a full life’/’dying prematurely’. Latter is spiritually dangerous and associated with ‘hungry ghosts’.
  • Chinese ideas on ‘good life’ and ‘good death’:

- Good life: refers to improving one’s life quality as one grows older

- Good death: refers to living a comfortable life towards the end of life and dying after a full life

  • Completely incompatible with underlying logic of life insurance: ‘pricing a human life’ or early death
  • Result: people have ‘selective inattention to fatal risks’ / ‘puts it out of cultural schematic frames’
  • Empirical observations: ‘don’t want to talk about bad things’ / ‘a waste of money’  ‘not worth it’
  • Preference for money management products: want money back during their lives
  • Conclusion: cultural similarity incl. taboos
  • So: why is it in reality vice versa? Why is life insurance in Taiwan much more popular than in Hong Kong?
  • Context on Hong Kong: Former British colony until 1997, hardly any domestic insurance companies, open market; foreign insurance companies rule.
  • Context on Taiwan: Commercial insurance introduced by Japanese in late 19th century, only domestic insurance firms, heavily protected by government regulations, USA forced market to open in 1980’s.
  • So what is the difference?
    Hong Kong: Western insurance firms continued to push the western idea of risk management. – Tried to educate people about the risks of life and necessity to protect your family – ‘It didn’t drive them to buy. It was savings that drove them to buy’

Taiwan: Life insurance was a savings instrument. – Living insurance: similar to saving, but family is paid when person dies – Foreign firms started to push ‘death insurance’ later, without success.

  • Hong Kong started to sell life insurance in much larger proportions after 2001. WHY? Life insurance was combined now with money management products that fitted local preferences à cultural adaptation

Why became ‘Culture’ relevant in management studies?

Reason 1: Contextual changes around 1980 – Emergence of Japan as an important competitor

Reason 2: Task related changes – Managers increasingly realized that success of M&As depends on successful integration of people and organizations.

Reason 3: Academic Arguments. Why do we study in academic fields as Management, International Business or Economics? – Assumption of ‘rational decision making’ does not hold in practice. Explanatory power is limited. – Culture plays an important role here.

Reason 4: Culture affects different managerial roles in daily practice: Role 1: Manager as decision maker (CH5). Role 2: Manager as negotiator (CH6). Role 3: Manager as leader (CH7)

Role 1: Decision maker: how rational can you be?

  • So rational decision making does not hold in practice and culture is important?
  • What is a ‘rational decision’?
  • Follow the steps:
    - problem definition
    - decision criteria
    - weighting of criteria
    - alternatives
    - evaluations
    - selection of optimal solutions
  • Deviations from rational decision making: bounded rationality: ‘incomplete information’ and ‘satisficing strategies’. Or even ambiguity.
  • Cultural constraints on rationality:
    Vigilance: collection of facts and consideration of alternatives, but:
    - Complacency: ignoring the decision
    - Defensive avoidance: putting off, passing on the decision to someone else, or devaluating its importance
    - Hypervigilance (panicking)
  • Simplifying strategies, different heuristics:
    - Availability
    - Representativeness
    - Anchoring and adjustment

Role 2: Negotiator

Negotiators with different cultural backgrounds differ in terms of (for instance):

  • Language issues:
    - language as a communication tool: finding a bridge language (pros/cons)
  • Communication style:
    - explicit/implicit
    - direct/indirect
    - silence/verbal
  • Non-verbal communication:
    - tone of voice
    - proxemics
    - body posture and gestures
    - facial expressions
    - eye contact
  • High-context vs low context cultures
    High context cultures:
    - Speaking style focuses on in-group members who share similar experiences
    - With little pieces of information/words communicates complex messages due to referral to context
    - HCCs are relational, collectivist, intuitive and contemplative
    - In business relations: trust is key
    Where: Middle east, Asia, Africa, South America, Japan.
    à Cultures in which groups are valued over individuals
    à Cultures with strong sense of tradition and history
    Low context cultures:
    - Speaking style assumes less ‘contextual clues’ and is necessarily more explicit

- LCCs are logic, facts and directness

- In business relations: explicit contracts are important

Where: US / Northern parts of Europe
à Accommodates variety in individual backgrounds
à Cultural change is more rapid

Role 3: Leader

  • How leadership is defined depends on ‘schema’ which differ as result of cultural differences (f.i., think about power distance in Hofstede’s dimensions)
  • When leadership is defined differently, different behaviour is expected both from leaders/managers as well as employees
  • Leaders are supposed to motivate, but what motivates people? Culture matters:
    - Content theories
    - Process theories: equity, expectancy, goal-setting
  • ‘In the eye of the beholder’ (Javidan et al – reader)

 

How can we expect one country’s theories of management to apply abroad?

“Can American Management concepts work in Russia?” (Elenkov, CMR 1998)

  • Describes variety in managerial values between USA and Russia
  • Shows that differences in cultural values affect cross-border transfer of managerial concepts
  • For instance:
    Russia:
    - High power distance / collective mentality
    - Employees expect autocratic leadership
    Incompatible with US concepts of Leadership:
    - Small power distance / individualistic
    - Employees expect participation in decision making, confidence and independence negotiate with boss

 

 

 

 

 

 

 

Example: Goal-setting performance appraisal process:

  • Requires: Task analysis / goal setting / self-appraisal / personal evaluation by manager / direct face-to-face feedback
  • Concept matches with USA culture: Low degree of ‘political influence orientation’, high degree of individualism, Direct and personal feedback words
  • Much less with Russian culture: High degree of ‘political influence orientation’, Higher degree of collectivism, Direct feedback destroys harmony and ‘employee loses face’, on the contrary; evaluating group performance and indirect feedbacl are more effective

 

 

Week 5 – Lecture 5 & Chapter 8,9,10

 

Chapter 8 The Challenge of Multicultural Work Groups and Teams

Workgroups

The types of work groups that are of most concern to managers have four distinctive characteristics:

  1. Work groups are social systems that have boundaries with members who have different roles and are dependent on each other. Both people within the group and those on the outside will recognize the group’s existence and which are not
  2. These groups have tasks to perform
  3. Work groups need to deal with the relationship between individuals and the group, so that members contribute to the group and remain members.
  4. Work groups function within and as part of a larger organization

Three primary types of work groups:

  • Task forces = focus on the completion of specific project, typically within a limited time frame. Members selected on task-related skills.
  • Crews = focus on tools required ot perform a task and the appropriate use of the tools specifies the interaction among group members.
  • Teams = sets of people who each have specific skills and abilities and who are provided with tools and procedures to address a team’s tasks over a long period of time.

These differences in work group types highlight the need to recognize the structure of a work group when managing or working in intercultural organizational groups.

 

Work group effectiveness

Effectiveness of a work group depends on how well the group uses its resources to accomplish its task. However, not all organizational tasks have clear best answers. The long-term effectiveness of a work group might not be assessed accurately by considering only how it is performing at a single point in time. Therefore a broader definition of work group effectiveness is needed to portray whether a work group is functioning well:

  • First, the output of the group must meet the quantity, quality and timeliness standards of the organization
  • Second, the processes employed by the group should enhance the ability of the group members to work together.
  • Finally, the group experience should contribute to the growth and personal wellbeing of the group

This broader definition encourages a longer-term view of work group effectiveness consistent with the requirement that work groups function within the confines of the larger organization.

To understand the implications of culture for group effectiveness, it is first necessary to identify the underlying dynamics of work groups.

The model identifies six sets of variables that influence the process and performance of work groups: (1) external/contextual conditions imposed on the group (2) resources of group members (3) structure of group (4) group task (5) group process (6) composition of group.

An international manager might at first be most concerned with the cultural composition or geographic dispersion of the group. In order to take advantage of the positive potential of cultural diversity, these factors cannot be understood in isolation and must be considered in the context of dynamics of the group.

External conditions
Part of group behaviour is determined by larger organization to which the group belongs. The strategy of the organization, the authority structures and regulations employed to implement that strategy determine which groups in organizations get resources and dictate the type f behaviour that receives rewards. Besides, the number and variety of group memberships can have competing effects on group productivity and learning.

Group member resources

Group members bring two types of resources to groups: personal attributes, including personality, values and attitudes, and their skills and abilities, both technical and social. Member skills and abilities are positively related to group performance.

Group structure

Work groups can be categorized as task forces, crews or teams. Each of these structures shapes the behaviour of group members by prescribing the norms, role expectations and status relationships shared by group members. Of particular importance to effectiveness of work groups are norms about the processes related to task performance. These norms specify such things as what methods and channels of communication are important and the level of individual effort expected and they also provide group members with explicit guidance as to how to accomplish the task. Although all groups share the same types of norms, the norms for a particular group are unique. Group member roles are affected by the conflict created in the process of role assignment. The effect of status systems in groups can be summarized in three categories: (1) effect of a person’s status on his/her relationship with other group members (2) effect of a group member’s self-esteem on his/her evaluation by others (3) effect of status on a group member’s self-esteem.

Group processes

Group process = how groups achieve their outcome, involve such things as focusing group effort, the dynamics that occur during group functioning and the relationships among group members. When group processes, such as communication patterns, decision processes and conflict reactions, cause a group fail to meet its potential, it has suffered a process loss. Examples of process losses: Groupthink = norm for group consensus overrides the motivation to realistically appraise alternative courses of action. Social loafing = individuals reduce their effort on group tasks expecting that other members will do the work form them. Group processes over time

Tuckman (1965) proposed that all groups go through five stages:

  • Forming stage= group members just begin to think of themselves as part of a group and might be uncertain about the group and how they fit into it.
  • Storming stage= characteristics, attitudes and expectations of individuals come into conflict with the structure of the group
  • Norming stage = the group agrees on the expectations that specify the acceptable behaviour (norms) of the group.
  • Performing stage = efforts of the group shift to accomplishing the task at hand.
  • Adjourning stage = stage once task is completed, only for task forces and crews

For groups that have a deadline for the accomplishment of their task, another development model called the punctuated equilibrium model might be more helpful. (more info p.162)

Group task

The nature of the tasks in which the work group is engaged influences both the processes and outcomes of the group. Tasks relate not only to the end result of group activity but also specify such aspects of group processes as the degree and nature of interdependence of group members. Three primary types of group tasks:

  • Clearly defined production tasks
    motor skills, some objective standard of performance
  • Cognitive or intellective tasks
    problem-solving tasks with a correct answer, whereas decision-making tasks are involved with reaching consensus on the best solution to a problem.
  • Creative idea generation and decision-making tasks.

Group composition

Members of work groups might be similar or different on a number of different dimension (gender, age, experience, nationality) important to the performance of the group. Group composition can be classified as homogenous on a particular dimension, heterogeneous on that dimension, or minority-majority. Minority-majority groups consist of groups in which one or a few members are different on the dimension of interest.

 

Culture’s influence on work groups

The cultural backgrounds of a work group’s members affect the way they function through three general types of mechanisms:

  • Cultural norms: the orientations of the specific cultures represented in the group toward the functioning of groups
  • Cultural diversity: the number of different cultures represented in the group
  • Relative cultural distance: the extent to which group members are culturally different from each other

 

These mechanisms are interrelated, but each affects the way groups operate in different ways.

 

Cultural norms

Like other behavioural norms, the norms for interacting in a group can vary according to culture. Although the norms for any work group are unique, one of the bases for these norms in all groups is the individuals’ previous group experience. Therefore, in multicultural work groups, individuals from different cultures are likely to have very different ideas, at least initially, about how to work group should go about its task, how they should behave, and how they should interact with other group members.

Cultural diversity

A second influence on work group effectiveness is the number of different cultures represented in the group – its cultural diversity. The effect of cultural diversity in the work group clearly has both positive and negative elements. On the one hand, it has the potential to increase group performance through a greater variety of ideas and perspectives and an increased focus on group processes by members. On the other, the probability of increased process losses exists, but this negative effect can be minimized by effective diversity management.

Relative cultural distance

Members of a culturally different work group compare themselves to the other members, when he perceives his status in the group favourably, he is likely to participate more fully and perceive the group more positively. Besides, the relative cultural difference influences the extent to which they identify with the task group versus their cultural group. This influences their willingness. The extent to which group members differ from other members of the group affects their assessment of the level of conflict in the group and their willingness to express their ideas.

 

Culture’s effect on different group structures and tasks

The types of group task and the group structure both can affect the influence that the cultural composition of the work group has on group outcomes.

 

 

 

 

 

 

Global virtual teams

Key characteristic of global virtual teams is that they interact primarily by electronic networks. Therefore, work group members can be separated by time, geography and culture as well as by work practices, organization or technology. Global virtual teams have special challenges in terms of (1) communication (2) relationship building (3) conflict management (4) task management.

Communication

- Electronically mediated groups tend to form more slowly

- hinder the openness of sharing information that is important to team effectiveness

Relationship building and conflict management

- Because of electronic intermediation, the lack of evidence of cultural differences might make culture a less salient dimension in virtual groups.

- the fact that members of virtual teams may have little in the way of shared context makes the development of team identity more difficult.

Task management

The importance of defined roles, a clear task strategy and explicit interaction norms is heightened in virtual teams. Research findings about the effects of virtualness on the quality of teams’ decisions have been mixed.

 

Organizational context and culturally diverse work groups

Key organizational factors that influence the ability of work groups to handle the technological and geographic issues mentioned previously are the level of management support, the extent to which individual rewards come from the group, the status afforded the group, the amount of training provided to the group and the extent to which the organization allows groups to be self-managed.

Management support

Most effective work groups exist in organizations that provide high levels of organizational support, such as making sure the work groups have the materials and information necessary to achieve their goals.

Group-level rewards

Relationship between rewards and group performance is mixed. (read more p. 172)

Work group status

High-group status has positive effect on the individual improves both individual and work group performance. The extent to which individuals from different cultures derive their self-esteem from work groups can vary considerably.

Training

Work group success requires training in interaction skills. However, managers seem often to assume that employees automatically have the skills to be effective work group members. Cross-cultural training has the objective of bringing the expectations of individuals from different cultural backgrounds in line with the reality of working in a multicultural context.

Self-management

The argument for self-managing work groups stems from the idea that the benefits of group work are related to the delegation of a substantial amount of authority to the work group. However, if too much authority is delegated, work groups can charge off in inappropriate directions. Achieving an appropriate level and type of delegation for multicultural work groups can be a particularly difficult management task.

 

Managing multicultural work groups

Managers must try to find ways to maximize the positive consequences of both homogeneity and diversity while minimizing the negative consequences of both.

 

Chapter 9 The Challenge of International Organizations: Structure and Culture

Organizations

Structure of the organization: organization must be coordinated through differentiation of roles and a hierarchy of authority to achieve goals. This structure can be described by its degree of complexity, formalization and centralization.

Horizontal differentiation à number of different types of jobs that exist in an organization.

Vertical differentiation à number of levels in the hierarchy of the organization.

Spatial differentiation à extent to which the organization’s physical facilities and personnel are geographically dispersed.

Horizontal, vertical and spatial differentiation increase complexity.

Formalization à extent to which rules and procedures govern the activities of organization members.

Degree of centralization à indicated by the extent to which decision-making is concentrated at a single point.

Mutual adjustment à relies heavily on organizational norms, colleagues and subordinates own judgment to observe what others are doing and coordinate their own work with others.

Direct supervision à rely heavily on the personal judgment of superiors.

Standardization of work processes à extensive use of detailed written rules and procedures.

Standardization of outputs à rely heavily on a somewhat limited set of rules that specify goals and leave the means of attaining the goals up to the influence of other roles, rules and norms.

Standardization of skills à rely heavily on employees’ self-guidance and on professional societies and the judgment of groups made up of fellow professionals to control these employees.

Organizational designs

Five types of organizational designs:

Operating core à consists of the employees who perform the basic tasks related to the production of products and servies. This part of the organization is dominant in a professional bureaucracy, which is populated by highly trained specialist.

Strategic apex à top-level managers who have overall responsibility for the organization. In simple organization structures, the strategic apex dominates.

Technostructure à composed of technical analysts who have responsibility for formulating rules and procedures to standardize the work that is done in the operating core. The influence of the technostructure is strongest in the machine bureaucracy.

Middle line à those managers who connect the operating core to the strategic apex. Senior middle-line managers are especially influential in multinational organizations that operate as divisional structures composed of semiautonomous units coordinated by a central headquarters.

Support staffs à provide advice, internal consulting and other indirect support services to the rest of the organization. The support staff is especially influential in an adhocracy, composed of highly skilled professionals who are organized into a variety of temporary, overlapping teams.

 

Ecological theories

Focus not on single organizations but on the strategies, structures and management of whole populations of organizations, such as industries. In this view, the environment determines organizational structure, not by managers selecting an effective structure but by selecting out those organizations that do not fit. Managers are views as very limited in their ability to adapt their organizations’ structures to changing conditions. Environmental selection drives the evolution of corporate structures and actions by managers have little effect.

Institutional theory

Focuses on the ways that organizations in shared environments come to adopt similar structures that are reinforced in interactions with other organizations. It explains the structural similarity (isomorphism) that exist across organizations within an industry. Institutional theory suggests that two factors influence organizational structure: (1) effect of environmental agents (e.g. regulatory agencies, professional societies) in shaping the organization (2) processes within the firm that interpret certain externally validated structures as appropriate. Three categories of environmental pressures toward institutional isomorphism:

  • Coercive isomorphism: patterns of organization are imposed on the firm by an outside authority, such as government
  • Normative isomorphism: professional bodies promote ‘proper’ organizational structure.
  • Mimetic isomorphism: organizations copy the structure of firms that have been successful in dealing with a particular environment

Institutional theory was developed, in part, to explain globalization, particularly of national governments.

 

Culture and organizational structure

A fundamental question concerning international organizational design is why organizations in different societies are alike in some respects and different in others.

 

Culture-free perspective

Contingencies that affect organizations operate in a similar fashion across cultures. It does not deny the existence of cultural differences in the way organizations are designed and operate; it just considers culture irrelevant. Culture-free perspective provides insight in terms of very general structural configurations.

Structural variation across cultures

As alternatives to the culture-free perspective, a number of approaches that specify more direct mechanisms of cultural influence have been proposed. Two mechanisms by which national culture influences organizational structure:

  • In the first case, organizational structure is seen as a manifestation/symptom of the management group’s cultural background. The logical extension of specific cultural value orientations includes explicit organizational structure arrangements and even more strongly, the way that these arrangements are put into practice.
  • In the second case, national culture competes with global forces to influence the extent to which different ways of organizing are accepted by the members of a society. Pressures from the organizational environment, which includes the cultural context, dictate the type of structure seen as correct or legitimate.

As we can see in the figure, the contextual variables central to culture-free contingency approaches (size, technology, strategy) can account for some of the similarity in organizational structures found around the world. Through one path, differences in organizational choices that managers make are guided by their culturally based value orientations. The other avenue for cultural influence relies on environmental pesssure to shape organizational structure.

 

 

 

 

 

 

 

Informal organizations

Informal organizations = those elements of an organization that help to reduce individual variability in the behaviour of organization members but is not reflected in a formal organization chart. Organizational culture produces both functional behaviours that contribute to the goals of the organization and dysfunctional behaviours that have negative effects. A strong organizational culture can be a barrier to change in the organization, create conflict among organizational subcultures or make it difficult for firms with different cultures to merge or collaborate closely.

 

 

Organizing in multinational organizations

The MNO is a single organization with a need to coordinate its operations across multiple environments.

Multinational structures

Five ways of integrating international activity are common:

  • International division: groups all international activities together in a single organizational unit and is more popular with US than European MNOs.
  • Product division: groups all units involved with like products together around the world. It is possible for foreign subsidiaries in the same country to have a different relationship to the firm depending on the product line.
  • Functional division: expands its domestic functional units into its foreign counterparts (e.g. marketing Europe, marketing North America) based on geography.
  • Geographic division: expands its domestic functional areas into geographic units. As long as geographic divisions provide the investment returns or other output that headquarters seeks, these division managers typically have a great deal of autonomy, although modern communication technology can foster excessive micromanagement by headquarters.
  • Matrix structure: each subsidiary reports to more than one group (product, geographic or functional) for the purpose of integrating international operations with functional areas, product areas or both. The popularity of this types of structure has waxed and waned as the advantages of integration versus the disadvantages of dual reporting were weighed against each other.

A popular and influential categorization of MNO types that builds on these five MNC types is provided by Bartlett and Ghoshal:

 

 

 

 

International collaborative alliances

Collaborative alliances = these alliances typically take one of three forms: informal cooperative alliances, formal cooperative alliances and international joint ventures.

Informal type à limited in scope and has no contractual requirement

Formal type à require a contractual agreement and are often indicated by broader involvement.

Joint ventures à separate legal entities with joint ownership.

Collaborative arrangements result in new structures, the form of which must be determined from the organizational preferences of the partners.

Selection of partners and formation of structure in the alliance are facilitated by an understanding of the culturally based assumptions and preferences of potential partners with regard to both the formal and informal organization.

International mergers and acquisitions

Another way in which new organizational forms are created is through the merger of firms or the acquisition of one firm by another. Post-merger integration does not always achieve the desired results. Cross-border M&As demand a double-layered acculturation à as organizations must align both organizational and national cultures, one may conclude that they will be significantly more challenging than domestic M&As. Cross-cultural coparison of M&As have found cultural differences in preferences for types of integration process, control systems and management practices by acquiring firms. Acquirers have cultural-based preferences for approaches to integration and targets have culturally based tendencies for the way they react to integration.

Stahl (2008) suggests that culture affect the outcomes of M&A in two distinct and sometimes opposing ways:

  • Cultural differences can have an adverse effect on integration outcomes, such as the creation of positive attitudes towards the new organization, the emergence of a shared sense of identity and the development of trust.
  • Cultural differences can also be a source of value creation by providing new and unique capabilities, resources and learning opportunities.

The influence of cultural differences seems to depend on the integration design chosen (total autonomy – total absorption) and on the use of social integration mechanisms, such as informal control, personal rotation, training programs and cross unit teams.

 

MNO subsidiary structure

MNOs are confronted with additional complexity because of geographic and cultural differences among subsidiaries and between subsidiary and headquarters. In new environments, the pressures for local adaptation derive from the social nature of the organizations and hence their tendency to reflect the values, norms and accepted practices of the societies in which they operate.

 

The pressures for conformity to local norms and for internal consistency with the rest of the organization can vary from subsidiary to subsidiary.  

Relationship of the MNO to its members

Two lenses have been used to examine the relationship of individuals to multinational organizations. These are roles of managers and the psychological contracts.

Managerial roles in MNOs
The complexity of the global environment of MNOs emphasizes the key managerial roles of information exchange, coordination, information scanning and control. Considering the structure of MNO as a network of subunits that exists in a variety of environments and  thus in terms of competing forces on the subsidiary raises additional issues about the role of the managers of the organization. Because of the loose coupling of subunits of the organization that results from this organizational form, much of the coordination and control shifts to individuals in positions that link the subunits. The managers of subsidiaries of MNOs, because they function across internal and external organizational boundaries, perform this linking function and occupy these unique boundary-spanning roles. When the expectations of the environment are conflicting or unclear, the emphasis that managers place on different roles can be more susceptible to cultural influence.

Cultural differences in the psychological contract

The unique characteristics of MNO serve as one indicator of what is expected of organization members and what they can expect in return. The psychological contract consists of individual beliefs or perceptions concerning the terms of the exchange relationships between the individual and the organization.

Transactional aspects of contract à emphasize specific short-term, monetary obligations. Limited involvement of parties is needed.

Relational contracts à emphasize broad, long-term, socioemotional obligations, such as commitment and loyalty.

 

Chapter 10 The Challenge of International Assignments

 

The role of expatriates

The fundamental preferences of MNOS for a particular staffing strategy have been described as (1) polycentric = local foreign manager only (2) ethnocentric = home country managers predominate (3) geocentric = a mix of nationalities at home and abroad (4) regiocentric = mix of nationalities within regions.

Staffing strategy of MNO is affected by its stage of internationalization, its country of origin, the size and the task complexity of its foreign affiliates and the cultural distance of the affiliate from headquarters. There are advantages and disadvantages for the firm associated with each of these strategies. The role expectations that organizations have for expatriates can vary considerably in the extent to which they emphasize coordination and control or boundary spanning.

 

Individual staffing decisions

Reflect the overall firm-level staffing strategy. Staffing strategy of MNOs affects the role that employee is expected to fill while on the overseas assignment. This role is very likely to involve the use of his/her technical expertise or the exercise of managerial control over the foreign operation but can have a developmental or boundary spanning component. Although these roles seem fairly consistent across cultures, the nationality of the firm might influence both the strategy of the firm and the role expectation that it has for employees on foreign assignment.

Selection of managers for overseas assignments

Technical competence was the primary decision criterion used by firms in selecting employees for these assignment. The reliance on technical expertise as the most important selection criterion for success in an overseas assignment is probably not well founded.

Decision to accept an overseas assignment

The pool of potential applicants available to the manager making a staffing decision is limited by a number of factors, including restrictions imposed by other organizational requirements and those imposed by the individuals themselves. Research highlights the differing perspectives on an overseas assignment from the point of view of the firm and from that of the employee. Although firms tend to select expatriates based largely on technical requirements, the expatriates themselves are motivated primarily at least on their first posting, by the opportunity for career advancement. And they are very concerned with family issues. It seems therefore, that conflict between the expectations that firms have for an expatriate and the perceptions that expatriates have of their role is often built in at the outset of the experience.

 

Definitions of success

Firms and their expatriate employees are concerned with the success of overseas assignments. Focus primarily on three outcomes of the expatriate experience: turnover, adjustment and task performance.

Turnover

Most frequently used measure of expatriate success. The premature return of expatriates to their home country. This has been measured as the intent to remain on assignment for the time originally agreed upon.

Adjustment

The ability of the expatriate to overcome culture shock and adjust to the new environment. A psychological definition of adjustment is a condition consisting of a relationship with the environment in which needs are satisfied and the ability to meet physical and social demands exist.

Honeymoon stage à everything is new, exciting and interesting and the new environment intrigues the expatriate in much the same way as if the expatriate were a tourist.
Culture shock stage à expatriate becomes frustrated and confused because the environment is not providing familiar cues.

Adjustment stage à expatriate begins to understand cultural differences, learns the ways to get things done and begins to settle into the rhythm of daily living in the foreign country.

Mastery stage à expatriate becomes able to function in the new culture almost as well as at home. Not all expatriates achieve mastery in their new environment

 

 

 

 

Task performance

Third major indicator of expatriate success. A distinctive feature of the expatriate role is the requirement that expatriates meet the often-conflicting performance expectations of home office superiors and host nationals.

 

Adjustment-performance relationship

Different facets of adjustment can affect the performance of employees on overseas assignment in different ways. Also depends on how performance is assessed. The assumption that good adjustments leads directly to good performance is probably an oversimplification. An overseas assignment is successful if the individual:

  • Meets the performance expectations of quality and quantity of both home country and host country superiors
  • Develops and maintains satisfactory relationships with local nationals
  • Acquires skills related to managing people of different cultures
  • Remains on assignment the agreed-upon length of time

 

Factors affecting expatriate success

Individual factors
Family situation, adaptability, k=job knowledge, relational ability, openness to other cultures. A wide range of individual characteristics can potentially influence success or failure of an expatriate experience.

- Demographics à age, education, tenure, married or not, family

- Foreign language ability and previous international experience

- Nationality of expatriates

- Gender of expatriates à some countries barriers for women

Job and organizational factors

- Expatriates job characteristics

- Job level

- Expatriate training

 

 

Environmental factors

- Cultural novelty à extent to which the host country culture is different from the expatriate’s home culture

- Social support

 

Repatriation

It has long been recognized that re-entry to one’s home country after a long sojourn requires a process of adjustment similar to that of the initial transfer oversees. When expatriates return to their home country, their newly won skills are rarely used. Longer tenure overseas results in more difficult repatriation.

 

Outcomes of overseas assignments and global careers

The net effect of the overseas assignment is often described as having a neutral to negative effect on their long-term career. There is considerable concern about the value of an international assignment for an individual’s career and for the development of the firm.

 

Lecture 5 Cross-Cultural Management

 

Cultural distance and adaptation:

  • Level 1: Individual level à Expatriation process and other individual issues
  • Level 2: Group level à Diversity and the work group performance
  • Level 3: Company level à FDI country selection, entry modes and cross-border mergers and acquisitions plus international recruitment issues
  • Level 4: Societal level à Country diversity and societal integration processes

 

If companies cross borders they are faced with a couple of, often related, questions:

  • Question 1: Where to go and why?
  • Question 2: How to run foreign operations?
    Global standardization versus local adaptation
  • Question 3: Who needs to be assigned to the key positions?
    Home country, host country and third country nationals
    à Finding the right mix:
    - Individual level: expatriation
    - Group level: issues of cultural diversity
    - Perlmutter: ethnocentrism, polycentrism, geocentrism

 

Historical dimensions:

After WWII, American companies dominated the international scene.

  • American management style was seen as exemplary. As a result:
    - Export of American management concepts (‘one-size-fits-all)
    - Strong emphasis on expatriation of American managers due to perceived lack of local candidates for vacancies
  • History of economic domination has a cultural component as well – from colonialism to American supremacy
  • Strong emphasis on studies of expatriation process

 

LEVEL 1: INDIVIDUAL LEVEL
Expatriation process and other individual issues.

 

Working abroad: expatriation
Most important during expatriation: acculturation, adjustment or adaptation process
After expatriation: success/failure are important issues. Success relates to (1) turn-over (2) level of adjustment and (3) individual subjective well-being

 

Cultural adaptation / Cultural assimilation / Another option

Original Robinson Crusoe story: denial of any problem in cultural assimilation. Transplanting his own culture to new environment without problem.

However, when two cultures meet, variety of outcome is possible.

Reader: Van Reybrouck – Congo: a History 

Expatriates need to cope with cultural differences: focus on ‘culture shocks’, both in academia as well as in practice.

 

Culture shock = the personal disorientation a person may feel when experiencing an unfamiliar way of life due to immigration or a visit to a new country, or to a move between social environments, also a simple travel to another type of life.
Some symptoms of culture shock:

A feeling of sadness and loneliness, an over-concern about your health, headaches, pains and allergies, insomnia or sleeping too much, feelings of anger, depression, vulnerability, idealizing your own culture, trying too hard to adapt by becoming obsessed with new culture, the smallest problems seem overwhelming, feeling shy or insecure, become obsessed with cleanliness, overwhelming sense of homesickness, feeling lost or confused, questioning your decision to move to this place.

Two dimensions of adaptation:

  • Socio-cultural adjustment: the ability to fit in or effectively interact with members of the host country
  • Psychological well-being: an individuals’ subjective wellbeing or satisfaction in their new cultural environment

Three different aspects to adapt to:

  • Work
  • Interactions with others
  • General non-work environment

Four phases of cultural adaptation:

  • Honeymoon phase – first few weeks
  • Negotiation phase – between 1st and 3rd month
  • Adjustment phase – 6 to 12 months
  • Mastery phase – 12 months or more

Remarks:

  • People might only experience a few phases before they leave
    Many holiday experiences do not pass the honeymoon phase
  • People might only experience a few phases because of these phases
    Problem in adapting oneself and consequent choices (f.i. return home frustrated after negotiation phase)
  • Individual characteristics and cultural distances do matter to the severity of the shock

Reverse culture shock

Two sides to this:

  • Personal: cross-cultural experiences change your schemas and scripts while home-environment stays the same (f.i. Erasmus exchange students)
  • Environment: after long periods, home environment changes as well (emigrants to other countries, sometimes after decades)

Thomas Wolfe, 1940, ‘You can’t go home again’

 

Cultural distance and expat adjustment

  • Cultural distance matters: larger cultural distances lead to more adjustment problems. For Belgian people it is easier to adjust to Netherlands than for Chinese
  • And seems to be asymmetric
    German managers are better able to adjust to USA than vice versa. F.i. cultures with a high level of uncertainty avoidance might create more difficulties for outsiders to integrate

 

LEVEL 2: GROUP LEVEL

Diversity and the work group performance

 

Standard analyses: cultural diversity and work group performance 

  • Diversity in work groups can have positive and negative effects on group performance
    - Composition issues = who are the members?
    - Distance issue = how culturally diverse are the members?

     

Example of cultural distance measure (Kogut and Singh 1988)

Janssens and Brett (22006) ‘Fusion model of global team collaboration’

Compare three models:

- Dominant coalition

- Integration/identity model

- Fusion model – new

Interesting paper because:

  • Combines structural aspects group composition with team processes
  • Incorporates power differences between different team members
  • Combines different strands of literature
    Small group processes & Politcal / power approach
  • Leads to applicable suggestions (exam question?)
  • Not tested empirically (yet)

LEVEL 3: ORGANIZATION LEVEL

Company level: FDI country selection, entry modes and cross-border mergers and acquisitions plus international recruitment issues

 

Who will be assigned to which position in a MNE?
Depends on a variety of company goals and environmental factors.
For instance, what kind of control mechanism do you need in a foreign subsidiary (Harzing 2001) ?

A bear, a bumble-bee, a spider

 

Who will be assigned to key positions of foreign subsidiaries?

Three approaches (Perlmutter, 1969):

  • Ethnocentric policies: companies recruit staff members from their own home-country
    - Exploiting the advantages of familiarity
    - Expatriation is key!
  • Polycentric policies: companies recruit staff members from the host-country

- Exploiting the advantages of local knowledge and other assets

  • Geocentric policies: companies recruit qualified staff members from all over the world
    - Exploiting advantage of human resource qualities
    - Expatriation is key (again)!
    - See also the fusion model of Janssens and Brett

 

LEVEL 4: SOCIETAL LEVEL

 

 

See also course literature: Nahavandi and Malekzadeh (1988) on ‘Acculturation in Mergers and Acquisitions’.

- Use the same classification scheme and adapt it to organizational level

 

 

 

 

 

 

 

 

 

 

Example: Assimilation of Lt. John Dunbar – ‘Dances with wolves’.

  • Lt John Dunbar, in his remote Western civil war outpost:
    - Is a kind of expat
    - Does not care about his own culture – there is no value in its identity
    - Values the relationships with the other culture a lot
    - And is in close contact with them
  • Which triggers him to assimilate and turns him into ‘dances with wolves’
  • Beware: this is a personal adaptation, not a group level one. Idea is the same

 

Societal level: Country diversity and integration processes

  • Cultural variety within countries can differ:
    Nation states cover different cultural group (Indonesia, Dutch, Germans, Belgians)
  • Cultures change over time
    For instance process of modernization in emerging countries goes hand in hand with dramatic cultural shifts
  • Worldwide migration processes increase variety within countries and cultural change over time
  • Relative sizes of cultures change due to changes in population sizes

 

Future of cross-cultural issues in management

Depends on cultural trends. Some issues are at stake:

  • More variety in the global managerial labour market (short assignments, increased qualities of local host country candidates, extending the internal labour market, virtual teams, etcetera)
  • From expatriation to international careers
  • Bi-cultural employees/managers: dual pattern of identification, people who have a simultaneous awareness of being a member of (and alien in) two cultures

 

 

Join World Supporter
Join World Supporter
Log in or create your free account

Why create an account?

  • Your WorldSupporter account gives you access to all functionalities of the platform
  • Once you are logged in, you can:
    • Save pages to your favorites
    • Give feedback or share contributions
    • participate in discussions
    • share your own contributions through the 7 WorldSupporter tools
Follow the author: VivianVeelenturf
Promotions
vacatures

JoHo kan jouw hulp goed gebruiken! Check hier de diverse bijbanen die aansluiten bij je studie, je competenties verbeteren, je cv versterken en je een bijdrage laten leveren aan een mooiere wereld

verzekering studeren in het buitenland

Ga jij binnenkort studeren in het buitenland?
Regel je zorg- en reisverzekering via JoHo!

Access level of this page
  • Public
  • WorldSupporters only
  • JoHo members
  • Private
Statistics
[totalcount]
Comments, Compliments & Kudos

Add new contribution

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Enter the characters shown in the image.