1. The Role of CultureThe Role of Culture
Managing Across National and
Organizational Cultures
Chapters 5 and 6, Hodgetts, Luthans and Doh, International
Management: Culture, Strategy and Behavior , 6th
edition (New York:
McGraw-Hill Irwin, 2006)
Adapted from PowerPoint slides by R. Dennis Middlemist, Professor of
Management, Colorado State University
Mark McKenna
BUS 162 (6), International and Comparative Management
San Jose State University
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2. OVERVIEWOVERVIEW
1. Applying Hofstede’s Cultural
Dimensions
2. Organizational Cultures
3. Multiculturalism
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3. APPLYING HOFSTEDE’SAPPLYING HOFSTEDE’S
CULTURALCULTURAL
DIMENSIONSDIMENSIONS
1. Cross-Cultural Differences and
Similarities
2. Six Basic CulturalVariations
3. Exercise:A Jumping Off Place
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4. Differences and SimilaritiesDifferences and Similarities
Challenges for effective cross-cultural
management
◦ Parochialism: the tendency to view the world
through one’s own eyes and perspective
◦ Simplification: the process of exhibiting the same
orientation toward different cultural groups
Similarities across cultures
◦ In US and Russian firms organizational behavior
modifications led to performance improvements
◦ Antecedents of organizational commitment were
similar in US and Korea firms
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5. Differences and SimilaritiesDifferences and Similarities
Differences across cultures
◦ In the criteria used in evaluating personnel
Netherlands France Germany Britain
Reality
Analysis
Helicopter
Leadership
Imagination
Imagination
Analysis
Leadership
Helicopter
Reality
Leadership
Analysis
Reality
Imagination
Helicopter
Helicopter
Imagination
Reality
Analysis
Leadership
◦ In the norms and rules regulating wages,
compensation, pay equity, and maternity leave
◦ In labor relations, job design, and the design of
employee training programs
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6. Basic CulturalVariationsBasic CulturalVariations
1) What is the nature of people?
2) What is the person’s relationship to nature?
3) What is the person’s relationship to other
people?
4) What is the modality of human activity?
5) What is the temporal focus of human activity?
6) What is the conception of space?
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7. A Jumping Off PlaceA Jumping Off Place
A successful, mid-sized Ohio-based US
manufacturing firm decides to open a plan near
Madrid, Spain.
Factors in the decision include:
◦ The end of its licensing agreement with a German
firm
◦ New patents and technology
◦ Lower labor costs in Spain
The Spanish partner will provide on-site
support; the US firm will provide capital,
technology and training
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8. A Jumping Off PlaceA Jumping Off Place
If the venture in Spain is successful, the US
manufacturer plans to use this experience to
open plants first in Italy, then in France
Put yourself in the position of an international
consultant or manager
◦ What differences would you anticipate between
Spain and the US?
◦ How might lessons learned in Spain need to be
adapted for operations in Italy?
◦ How would France differ from both, and from the
U.S.?
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9. Figure 4-5:A Power-Distance andFigure 4-5:A Power-Distance and
Individualism-CollectivismIndividualism-Collectivism
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10. Figure 4-6:A Power-Distance andFigure 4-6:A Power-Distance and
Uncertainty-AvoidanceUncertainty-Avoidance
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11. Figure 4-7:A Masculinity-Femininity andFigure 4-7:A Masculinity-Femininity and
Uncertainty-AvoidanceUncertainty-Avoidance
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12. A Jumping Off PlaceA Jumping Off Place
Power
Distance
Indivi-
dualism
Uncertainty
Avoidance
Masculinity
USA
Low
(40)
High
(91)
Low
(46)
Mid
(62)
Spain
Mid
(57)
Low
(51)
High
(86)
Low
(42)
Italy
Low
(50)
High
(76)
High
(75)
Mid
(70)
France
Mid
(68)
Mid
(71)
High
(86)
Low
(43)
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13. Caveats and an ObservationCaveats and an Observation
Caveats…
◦ What is typical?
◦ How discrete are subcultures?
◦ Are values and beliefs fixed or fluid?
◦ What are the significant “dimensions”?
◦ Are attributes generalizable or situation specific?
Observation…
◦ “Understanding the properties and prospects of
nations requires openness to the richness and
diversity of national practices and institutions”
(Brendan McSweeney, http://geert-hofstede.international-business-
center.com/mcsweeney.shtml)
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14. ORGANIZATIONALORGANIZATIONAL
CULTURESCULTURES
1. Definition
2. Interactions between National and
Organizational Cultures
3. Strategic Predispositions of
International Organizations
4. A Typology of Organizational Cultures
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15. DefinitionsDefinitions
Hodgetts, Luthans and Doh (p. 154)
◦ “shared values and beliefs that enable members to
understand their roles and the norms of the
organization.”
Edgar Schein (1997, p. 12)
◦ “a pattern of shared basic assumptions that the
group learned as it solved its problems of external
adaptation and internal integration, and that has
worked well enough to be considered valid and,
therefore, to be taught to new members as the
correct way to perceive, think and feel in relation to
those problems.”
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16. InteractionsInteractions
The values and beliefs employees bring to the
workplace affect their behavior within the
workplace
Working for MNC may accentuate rather than
moderate or erase cultural differences
Cultural differences across subsidiaries often
cause coordination problems
Important dimensions of cultural difference
within organizations include: motivation,
relationship, identity, communication, control,
and conduct
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17. European’s Perceptions of Cultural DimensionsEuropean’s Perceptions of Cultural Dimensions
of U.S. Operations/Same MNCof U.S. Operations/Same MNC
Activities
Job
Corporate
Open
Tight
Conventional
Outputs
Person
Professional
Closed
Loose
Pragmatic
30 31 32 33 34 35 36 37 38 39 40 41 42
Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and
European Operations (B) of the Same MNC
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18. European’s Perceptions of Cultural Dimensions ofEuropean’s Perceptions of Cultural Dimensions of
European Operations/Same MNCEuropean Operations/Same MNC
Activities
Job
Corporate
Open
Tight
Conventional
Outputs
Person
Professional
Closed
Loose
Pragmatic
30 31 32 33 34 35 36 37 38 39 40 41 42
Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and
European Operations (B) of the Same MNC
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19. STRATEGICSTRATEGIC
PREDISPOSITIONSPREDISPOSITIONS
1. Ethnocentric
2. Polycentric
3. Regiocentric
4. Geocentric
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20. Strategic PredispositionsStrategic Predispositions
 Ethnocentric predisposition
◦ A nationalistic philosophy of management
whereby the values and interests of the parent
company guide strategic decisions.
Philosophies of
Management
Ethnocentric
predisposition
Ethnocentric
predisposition
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21. Strategic PredispositionsStrategic Predispositions
 Polycentric predisposition
◦ A philosophy of management whereby
strategic decisions are tailored to suit the
cultures of the countries where the MNC
operates.
Philosophies of
Management
Ethnocentric
predisposition
Ethnocentric
predisposition
Polycentric
predisposition
Polycentric
predisposition
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22. Strategic PredispositionsStrategic Predispositions
 Regiocentric predisposition
◦ A philosophy of management whereby the firm
tries to blend its own interests with those of its
subsidiaries on a regional basis.
Philosophies of
Management
Ethnocentric
predisposition
Ethnocentric
predisposition
Polycentric
predisposition
Polycentric
predisposition
Regiocentric
predisposition
Regiocentric
predisposition
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23. Strategic PredispositionsStrategic Predispositions
 Geocentric predisposition
◦ A philosophy of management whereby the
company tries to integrate a global systems
approach to decision making.
Philosophies of
Management
Ethnocentric
predisposition
Ethnocentric
predisposition
Polycentric
predisposition
Polycentric
predisposition
Regiocentric
predisposition
Regiocentric
predisposition
Geocentric
predisposition
Geocentric
predisposition
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24. Typology of Organizational CulturesTypology of Organizational Cultures
Person
Emphasis
Task
Emphasis
Equity
Hierarchy
Fullfillment-oriented
culture
INCUBATOR
Project-oriented
culture
GUIDED MISSILE
EIFFEL TOWER
Role-oriented
culture
FAMILY
Power-oriented
culture
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25. Typology of Organizational CulturesTypology of Organizational Cultures
Family culture
◦ Power oriented and headed by a leader who is
regarded as a caring parent
◦ Management looks after employees, ensures they are
well-treated
◦ May promote loyalty and commitment or lead to
support for an ineffective leader
Eiffel tower culture
◦ Jobs are well defined
◦ Everything is coordinated from the top
◦ Relationships are specific and job-related
◦ Status remains with the job
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26. Typology of Organizational CulturesTypology of Organizational Cultures
Guided missile culture
◦ Work is typically undertaken by teams or project
groups
◦ Individual expertise is more important than formal
hierarchies
◦ Team members are interdependent and (at least
potentially) equal
Incubator culture
◦ Organizations as incubators for self-expression and
self-fulfillment
◦ Little formal structure
◦ Focus is on development of an innovative product or
service
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27. MULTICULTURALISMMULTICULTURALISM
1. The Evolution of International
Corporations
2. Problems and Advantages of
Diversity
3. Putting It All Together
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28. The Evolution of InternationalThe Evolution of International
CorporationsCorporations
Phase1
Domestic
firms
Phase2
International
firms
Phase3
Multinational
firms
Phase4
Global
firms
Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent
Publishing, 1991), p. 123.
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29. Phases of MulticulturalismPhases of Multiculturalism
Domestic firms
◦ Focus on delivering a product or service in a domestic
market
◦ Ethnocentric perspective – “one good way”
◦ Multicultural challenge is to manage intra-national
cultural diversity
International firms
◦ Multidomestic market-oriented strategy
◦ Polycentric or regiocentric perspective – “many good
ways”
◦ Multicultural challenge is to manage cross-cultural
relationships with clients and employees
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30. Phases of MulticulturalismPhases of Multiculturalism
Multinational firms
◦ Focus is on lower costs and increasing efficiency
◦ Multinational perspective – “one least-cost way”
◦ Multicultural challenge is to manage intra-
organizational cultural diversity
Global firms
◦ Global dominance through mass customization
◦ Geo/multicentric perspective – “many good ways”
◦ Multicultural challenge is to manage both internal and
external diversity
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31. Problems and AdvantagesProblems and Advantages
Problems associated with diversity
◦ Lack of group cohesion
◦ Mistrust of others
◦ Erroneous or biased perceptions
◦ Miscommunication
Advantages of diversity
◦ Enhanced creativity
◦ Better decision making; preventing groupthink
◦ More effective and productive performance
Cross-cultural groups are better at innovation;
single culture groups are more effective
performing routine tasks
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32. Putting It All TogetherPutting It All Together
Complexity in organizational culture
◦ Interface between national and organizational
culture
◦ Types of organizational culture
◦ Degree of multiculturalism
Implications for managers
◦ National cultural values
 Impact on employee behavior
 Are not easily changed
◦ Particularly important when considering
 The management of human resources
 Mergers and acquisitions