+

Module IV: Cross Cultural Management Systems MBA General IV and Processes

ORGANISATIONAL CULTURE
A SET OF VALUES OR BELIEFS THAT IS UNIQUE TO ANY ONE ORGANIZATION. THE SIMPLEST DEFINITION OF CULTURE IS `THE WAY WE DO THINGS ROUND HERE' (DEAL AND KENNEDY, 1982). IT IS A COMBINATION OF VALUES AND BELIEFS, NORMS OF BEHAVIOUR THAT ARE ACCEPTABLE OR OTHERWISE, WRITTEN POLICIES, PRESSURES, AND EXPECTATIONS COMING DOWN FROM THE TOP, FORMAL AND INFORMAL SYSTEMS, PROCESSES AND PROCEDURES, AND NETWORKS.

SMIRCICH (1983) DEFINES ORGANISATIONAL CULTURE AS A FAIRLY STABLE SET OF TAKEN-FOR-- GRANTED ASSUMPTIONS, SHARED BELIEFS, MEANINGS, AND VALUES THAT BRING FORTH A NEW WAY OF UNDERSTANDING OF ORGANISATIONAL LIFE ACCORDING TO DENISON (1984), ORGANISATIONAL CULTURE REFERS TO THE SET OF VALUES, BELIEFS, AND BEHAVIOUR PATTERNS THAT FORM THE CORE IDENTITY OF AN ORGANISATION. THE CULTURE OF AN ORGANISATION IS A PRODUCT OF HISTORY, A VARIETY OF EXTERNAL AND INTERNAL INFLUENCES, AND PRIORITIES AND VALUES OF KEY PEOPLE IN IT. CULTURE IS REFLECTED IN THE ARTIFACTS - RITUALS, DESIGN OF SPACE, FURNITURE AND WAYS OF DEALING WITH VARIOUS PHENOMENON.

THE ROLE OF CULTURE IN AN ORGANISATION IS TO:

1.

SPECIFY THE GOALS AND OBJECTIVES OF THE ORGANISATION;

SPECIFY THE RELATIONS THAT EXIST WITHIN THE ORGANISATION;

2.

3.

SPECIFY WHAT QUALITIES ARE VALUED WITHIN ORGANISATIONS SUCH AS LOYALTY, CONFIDENTIALITY, DYNAMISM, HARD WORK, AND SO ON AND
SPECIFY THE WIDER CONTEXT WITHIN WHICH THE ORGANISATION OPERATES.

4.

Positive Aspects of an Organizational Culture

GUIDES DECISION MAKING PROVIDES IDENTITY FOR MEMBERS AMPLIFIES COMMITMENT GUIDES EMPLOYEE BEHAVIOR PROVIDES JUSTIFICATION FOR ACTIONS A 2003 HARVARD BUSINESS SCHOOL STUDY REPORTED THAT CULTURE HAS A SIGNIFICANT IMPACT ON AN ORGANIZATIONS LONG TERM ECONOMIC PERFORMANCE THE SUSTAINED SUPERIOR PERFORMANCE OF FIRMS LIKE HP, IBM, P&G AND MC DONALDS MAY BE PARTLY A REFLECTION OF THEIR ORGANISATIONAL CULTURE

Strength of an Organizational Culture

A STRONG CULTURE COULD HELP AN ORGANIZATION ADAPT TO THE ENVIRONMENT

A STRONG CULTURE CAN ALSO BE AN ANCHOR AROUND THE NECK OF CHANGE

+ THE HEWLETT-PACKARD WAY ENDURING VALUES THROUGH CHANGING TIMES

BASED ON THE BELIEF THAT PEOPLE ARE COMMITTED TO DOING THEIR JOBS WELL AND ARE CAPABLE OF MAKING SOUND DECISIONS, HEWLETT-PACKARD PRACTICES A HIGHLY INNOVATIVE STYLE OF MANAGEMENT KNOWN SIMPLY AS THE HP WAY. THE HP WAY ENGENDERS A VERY OPEN AND INFORMAL CORPORATE CULTURE. CONSISTENT WITH THIS THE COMPANY HAS DEVELOPED A MATRIX STYLE OF ORGANISATION RATHER THAN THE MORE FORMAL PYRAMID MANAGEMENT STRUCTURE POPULAR AMONG MANY COMPANIES.

IT HAS BEEN OUR POLICY NOT TO HAVE A TIGHT MILITARY-TYPE ORGANISATION, BUT RATHER TO HAVE OVERALL OBJECTIVES WHICH ARE CLEARLY STATED AND AGREED UPON, AND TO GIVE PEOPLE THE FREEDOM TO WORK TOWARDS THESE GOALS IN WAYS THEY DETERMINE BEST FOR THEIR OWN AREAS OF RESPONSIBILITY.
THE HEWLETT-PACKARD WORK ENVIRONMENT FOSTERS INDIVIDUAL DIGNITY, PRIDE IN ACCOMPLISHMENT AND THE MOTIVATION TO PRODUCE QUALITY WORK. IN RETURN THE COMPANY ENSURES THAT EMPLOYEES SHARE IN THE SUCCESS WHICH THEIR EFFORTS MAKE POSSIBLE.

CORPORATE OBJECTIVES

PROFIT CUSTOMER RESPECT AND LOYALTY PARTICIPATING IN RELEVANT FIELDS OF INTEREST; GROWTH HELPING OUR PEOPLE SHARE IN COMPANY SUCCESS MANAGEMENT THAT FOSTERS INITIATIVE AND CREATIVITY CORPORATE CITIZENSHIP AND RESPONSIBILITY.

Strategies and Practices

1.
2. 3.

MANAGEMENT BY WANDERING AROUND

MANAGEMENT BY OBJECTIVES OPEN-DOOR POLICY

4.

TOTAL QUALITY CONTROL.

Organisational Values
1.
2. 3.

TRUST AND RESPECT FOR INDIVIDUALS

A HIGH LEVEL OF ACHIEVEMENT AND CONTRIBUTION CONDUCTING BUSINESS WITH UNCOMPROMISING INTEGRITY ACHIEVING COMMON OBJECTIVES THROUGH TEAMWORK ENCOURAGING FLEXIBILITY AND INNOVATION.

4.

5.

COMPETING VALUE FRAMEWORK FLEXIBITY AND DISCRETION

EXTERNAL FOCUS AND DIFFERENTIATIO INTERNAL FOCUS AND INTEGRATION

CLAN

ADHOCRACY

HIERACHY

MARKET

STABILITY AND CONTROL

TYPES OF ORGANISATIONAL CULTURE

COLLABORATE (CLAN) CULTURE

CREATE (ADHOCRACY) CULTURE CONTROL (HIERARCHY) CULTURE

COMPETE (MARKET) CULTURE

COLLABORATE (CLAN) CULTURE

AN OPEN AND FRIENDLY PLACE TO WORK WHERE PEOPLE SHARE A LOT OF THEMSELVES IT IS LIKEAN EXTENDED FAMILY. LEADERS ARE CONSIDEREDTO BE MENTORS OR EVEN PARENTAL FIGURES GROUP LOYALTY AND SENSE OF TRADITION ARE STRONG. THERE IS AN EMPHASIS ON THE LONG-TERM BENEFITS OF HUMAN RESOURCES DEVELOPMENT AND GREAT IMPORTANCE IS GIVEN TO GROUP COHESION.

THERE IS A STRONG CONCERN FOR PEOPLE. THE ORGANIZATION PLACES A PREMIUM ON TEAMWORK, PARTICIPATION, AND CONSENSUS.

CREATE (ADHOCRACY) CULTURE

A DYNAMIC, ENTREPRENEURIAL, AND CREATIVE PLACE TO WORK. INNOVATION AND RISK-TAKING ARE EMBRACED BY EMPLOYEES AND LEADERS.
A COMMITMENT TO EXPERIMENTATION AND THINKING DIFFERENTLY ARE WHAT UNIFY THE ORGANIZATION. THEY STRIVE TO BE ON THE LEADING EDGE. THE LONGTERM EMPHASIS IS ON GROWTH AND ACQUIRING NEW RESOURCES.

SUCCESS MEANS GAINING UNIQUE AND NEW PRODUCTS OR SERVICES. BEING AN INDUSTRY LEADER IS IMPORTANT. INDIVIDUAL INITIATIVE AND FREEDOM ARE ENCOURAGED.

CONTROL (HIERARCHY) CULTURE

A HIGHLY STRUCTURED AND FORMAL PLACE TO WORK. RULES AND PROCEDURES GOVERN BEHAVIOR.
LEADERS STRIVE TO BE GOOD COORDINATORS AND ORGANIZERS WHO ARE EFFICIENCY-MINDED. MAINTAINING A SMOOTH-RUNNING ORGANIZATION IS MOST CRITICAL. FORMAL POLICIES ARE WHAT HOLD THE GROUP TOGETHER. STABILITY, PERFORMANCE, AND EFFICIENT OPERATIONS ARE THE LONG-TERM GOALS. SUCCESS MEANS DEPENDABLE DELIVERY, SMOOTH SCHEDULING, AND LOW COST. MANAGE- MENT WANTS SECURITY AND PREDICTABLITY.

COMPETE (MARKET) CULTURE

A RESULTS-DRIVEN ORGANIZATION FOCUSED ON JOB COMPLETION. PEOPLE ARE COMPETITIVE AND GOAL-ORIENTED.

LEADERS ARE DEMANDING, HARD-DRIVING, AND PRODUCTIVE.THE EMPHASIS ON WINNING UNIFIES THE ORGANIZATION.
REPUTATION AND SUCCESS ARE COMMON CONCERNS. LONG-TERM FOCUS IS ON COMPETITIVE ACTION AND ACHIEVEMENT OF MEASURABLE GOALS AND TARGETS. SUCESS MEANS MARKET SHARE AND PENETRATION. COMPETITIVE PRICING AND MARKET LEADERSHIP ARE IMPORTANT.

HOW CULTURES EMERGE

Top Management Agrees on shared assumptions of human behavior Develops a shared vision of cultural values

Behaviors Employees behave in ways that are consistent with shared values and assumptions

Results Financial performance Market share Employee commitment

Culture Strong culture emerges Traditions are maintained Socialization practices for new employees

RELATIONSHIP BETWEEN CULTURE AND PERFORMANCE

ORGANIZATIONAL

CULTURE CAN HAVE A

SIGNIFICANT IMPACT ON A FIRMS LONG-TERM ECONOMIC PERFORMANCE

ORGANIZATIONAL

CULTURE WILL

PROBABLY BE AN EVEN MORE IMPORTANT FACTOR IN DETERMINING SUCCESS OR FAILURE OF FIRMS DURING THE NEXT DECADE

RELATIONSHIP BETWEEN CULTURE AND PERFORMANCE

ORGANIZATIONAL

CULTURES THAT INHIBIT STRONG LONG-TERM FINANCIAL PERFORMANCE ARE NOT RARE; THEY DEVELOP EASILY, EVEN IN FIRMS THAT ARE FILLED WITH REASONABLE AND INTELLIGENT PEOPLE
TOUGH TO CHANGE, ORGANIZATIONAL CULTURES CAN BE MADE MORE PERFORMANCE ENHANCING IF MANAGERS UNDERSTAND WHAT SUSTAINS A CULTURE

ALTHOUGH

EFFECTS OF ORGANIZATIONAL CULTURE ON EMPLOYEE BEHAVIOR AND PERFORMANCE ALLOWS EMPLOYEES TO UNDERSTAND THE FIRMS
HISTORY AND CURRENT METHODS OF OPERATION
FOSTERS

COMMITMENT TO CORPORATE

PHILOSOPHY AND VALUES

SERVES

AS A CONTROL MECHANISM FOR EMPLOYEE

BEHAVIORS
CERTAIN

CULTURAL TYPES MAY PRODUCE GREATER

EFFECTIVENESS AND PRODUCTIVITY

EFFECTS OF ORGANIZATIONAL CULTURE ON ETHICAL BEHAVIOR

A CULTURE

EMPHASIZING ETHICAL NORMS

PROVIDES SUPPORT FOR ETHICAL BEHAVIOR

TOP

MANAGERS PLAY A KEY ROLE IN

FOSTERING ETHICAL BEHAVIOR BY EXHIBITING CORRECT BEHAVIOR

THE

PRESENCE OR ABSENCE OF ETHICAL

BEHAVIOR IN MANAGERIAL ACTIONS BOTH INFLUENCES AND REFLECTS THE CULTURE

HOW EMPLOYEES CAN CHANGE UNETHICAL BEHAVIOR

SECRETLY

OR PUBLICLY REPORTING UNETHICAL ACTIONS TO A HIGHER LEVEL WITHIN THE ORGANIZATION OR PUBLICLY REPORTING UNETHICAL ACTIONS TO SOMEONE OUTSIDE THE ORGANIZATION OR PUBLICLY THREATENING AN OFFENDER OR RESPONSIBLE MANAGER WITH REPORTING UNETHICAL ACTIONS OR PUBLICLY REFUSING TO IMPLEMENT AN UNETHICAL ORDER OR POLICY

SECRETLY

SECRETLY

QUIETLY

ACTIONS FOR CREATING A CULTURE THAT ENCOURAGES ETHICAL BEHAVIOR

BE

REALISTIC IN SETTING VALUES AND GOALS REGARDING EMPLOYEE RELATIONSHIPS INPUT FROM ORGANIZATION MEMBERS REGARDING APPROPRIATE VALUES AND PRACTICES FOR IMPLEMENTING THE CULTURE FOR A STRONG CULTURE THAT ENCOURAGES AND REWARDS DIVERSITY AND PRINCIPLED DISSENT TRAINING ON ADOPTING AND

ENCOURAGE

OPT

PROVIDE

+ MANAGING CULTURAL EFFECTIVENESS IN

ORGANIZATIONS IN INDIA

A TYPICAL CULTURE IN AN ORGANISATION IS INDIA IS CHARACTERISED BY :

A CLEAR PREFRENCE OF PERSONALISED RELATIONSHIPS OVER CONTRACTUAL ONES PRONE TO DEPENDENCY AND THE WORK ETHIC OF aaram- se, chalta hai : LOW WORK AND HIGH LESIURE

HIERACRHY STATUS AND AUTHORITY ORIENTED

AFFECTION DEFERENCE RELATIONSHIPS WITHIN ITS GROUPS AND LIKELY NEPOTISM AND POWER PLAY. GOVERNED BY SOCIAL MODELS AND BELIEFS OF RESPONSIBILTY, AUTHORITY, EQUALITY AND INTERPERSONAL RELATIONSHIPS EVEN IN WORK CONTEXT EMPHASIS ON APPLYING PARENT-CHILD MODEL TO BOSSSUBORDINATE RELATIONSHIP, EXPECTING THAT THE BOSS WOULD BE DIRECTIVE TO SUBORDINATE WHILE THE SUBORDINATE WOULD BE OBEDIENT,

THEORIES OF ORGANIZATIONAL CULTURE

DENISON (1990) IDENTIFIES FOUR BASIC VIEWS OF ORGANIZATIONAL CULTURE THAT CAN BE TRANSLATED INTO FOUR DISTINCT HYPOTHESES:
THE CONSISTENCY HYPOTHESIS THE IDEA THAT A COMMON PERSPECTIVE, SHARED BELIEFS AND COMMUNAL VALUES AMONG THE ORGANIZATIONAL PARTICIPANTS WILL ENHANCE INTERNAL COORDINATION AND PROMOTE MEANING AND A SENSE OF IDENTIFICATION ON THE PART OF ITS MEMBERS. THE MISSION HYPOTHESIS THE IDEA THAT A SHARED SENSE OF PURPOSE, DIRECTION, AND STRATEGY CAN COORDINATE AND GALVANIZE ORGANIZATIONAL MEMBERS TOWARD COLLECTIVE GOALS.

THE INVOLVEMENT/PARTICIPATION HYPOTHESIS THE IDEA THAT INVOLVEMENT AND PARTICIPATION WILL CONTRIBUTE TO A SENSE OF RESPONSIBILITY AND OWNERSHIP AND, HENCE, ORGANIZATIONAL COMMITMENT AND LOYALTY. THE ADAPTABILITY HYPOTHESIS THE IDEA THAT NORMS AND BELIEFS THAT ENHANCE AN ORGANIZATIONS ABILITY TO RECEIVE, INTERPRET, AND TRANSLATE SIGNALS FROM THE ENVIRONMENT INTO INTERNAL ORGANIZATIONAL AND BEHAVIORAL CHANGES WILL PROMOTE ITS SURVIVAL, GROWTH, AND DEVELOPMENT.

+ THESE HYPOTHESES FOCUS ON DIFFERENT ASPECTS

OF CULTURE BUT MORE IMPORTANTLY, THEY STRESS DIFFERENT FUNCTIONS OF CULTURE.

THE FIRST TWO HYPOTHESES TEND TO ENCOURAGE/PROMOTE STABILITY; THE SECOND TWO ALLOW FOR CHANGE AND ADAPTABILITY. THE FIRST AND THIRD HYPOTHESES SEE CULTURE AS FOCUSING ON INTERNAL ORGANIZATIONAL DYNAMICS; THE SECOND AND FOURTH SEE CULTURE AS ADDRESSING THE RELATION OF THE ORGANIZATION TO ITS EXTERNAL ENVIRONMENT.

CONSISTENCY MISSION

INVOLVEMENT ADAPTABILITY

THE HOFSTEDE DIMENSIONAL MODEL OF NATIONAL CULTURE

THE

HOFSTEDE MODEL (HOFSTEDE 2001; HOFSTEDE & HOFSTEDE 2005) DISTINGUISHES CULTURES ACCORDING TO FIVE DIMENSIONS: 1. POWER DISTANCE, 2. INDI- VIDUALISM/COLLECTIVISM, 3. MASCULINITY/FEMININITY, 4. UNCERTAINTY AVOIDANCE, AND 5. LONG-/SHORT-TERM ORIENTATION.

POWER DISTANCE

VALUE DESCRIPTION: THE DEGREE OF EQUALITY, OR INEQUALITY, BETWEEN PEOPLE IN THE COUNTRY'S SOCIETY HIGH SCORE :INDICATES THAT INEQUALITIES OF POWER AND WEALTH HAVE BEEN ALLOWED TO GROW WITHIN THE SOCIETY. THESE SOCIETIES ARE MORE LIKELY TO FOLLOW A CASTE SYSTEM THAT DOES NOT ALLOW SIGNIFICANT UPWARD MOBILITY OF ITS CITIZENS. LOW SCORE : INDICATES THE SOCIETY DE-EMPHASIZES THE DIFFERENCES BETWEEN CITIZEN'S POWER AND WEALTH. IN THESE SOCIETIES EQUALITY AND OPPORTUNITY FOR EVERYONE IS STRESSED.

INDI- VIDUALISM/COLLECTIVISM
DEGREE TO WHICH A SOCIETY REINFORCES INDIVIDUAL OR COLLECTIVE ACHIEVEMENT AND INTERPERSONAL RELATIONSHIPS. HIGH SCORE: INDICATES THAT INDIVIDUALITY AND INDIVIDUAL RIGHTS ARE PARAMOUNT WITHIN THE SOCIETY. INDIVIDUALS MAY TEND TO FORM A LARGER NUMBER OF LOOSER RELATIONSHIPS. LOW SCORE: TYPIFIES SOCIETIES OF A MORE COLLECTIVIST NATURE WITH CLOSE TIES BETWEEN INDIVIDUALS. REINFORCE EXTENDED FAMILIES AND COLLECTIVES WHERE EVERYONE TAKES RESPONSIBILITY FOR FELLOW MEMBERS OF THEIR GROUP.

MASCULINITY/FEMININITY

DEGREE TO WHICH A SOCIETY REINFORCES, OR DOES NOT REINFORCE, THE TRADITIONAL MASCULINE WORK ROLE MODEL OF MALE ACHIEVEMENT, CONTROL, AND POWER HIGH SCORE :INDICATES THE COUNTRY EXPERIENCES A HIGH DEGREE OF GENDER DIFFERENTIATION. MALES DOMINATE A SIGNIFICANT PORTION OF THE SOCIETY AND POWER STRUCTURE, WITH FEMALES BEING CONTROLLED BY MALE DOMINATION. LOW SCORE :INDICATES THE COUNTRY HAS A LOW LEVEL OF DIFFERENTIATION AND DISCRIMINATION BETWEEN GENDERS. FEMALES ARE TREATED EQUALLY TO MALES IN ALL ASPECTS OF THE SOCIETY.

UNCERTAINTY AVOIDANCE

LEVEL OF TOLERANCE FOR UNCERTAINTY AND AMBIGUITY. WITHIN THE SOCIETY - I.E. UNSTRUCTURED SITUATIONS.
HIGH SCORE : INDICATES THE COUNTRY HAS A LOW TOLERANCE FOR UNCERTAINTY AND AMBIGUITY CREATES A RULE-ORIENTED SOCIETY THAT INSTITUTES LAWS, RULES, REGULATIONS, AND CONTROLS IN ORDER TO REDUCE THE AMOUNT OF UNCERTAINTY. LOW SCORE : INDICATES THE COUNTRY HAS LESS CONCERN ABOUT AMBIGUITY AND UNCERTAINTY AND HAS MORE TOLERANCE FOR A VARIETY OF OPINIONS. REFLECTED IN A SOCIETY THAT IS LESS RULE-ORIENTED, MORE READILY ACCEPTS CHANGE, AND TAKES MORE AND GREATER

+ LONG-/SHORT-TERM ORIENTATION

DEGREE TO WHICH A SOCIETY EMBRACES, OR DOES NOT EMBRACE, LONG-TERM DEVOTION TO TRADITIONAL, FORWARD THINKING VALUES.

HIGH SCORE :INDICATES THE COUNTRY PRESCRIBES TO THE VALUES OF LONG-TERM COMMITMENTS AND RESPECT FOR TRADITION. THIS IS THOUGHT TO SUPPORT A STRONG WORK ETHIC WHERE LONG-TERM REWARDS ARE EXPECTED AS A RESULT OF TODAY'S HARD WORK. HOWEVER, BUSINESS MAY TAKE LONGER TO DEVELOP IN THIS SOCIETY, PARTICULARLY FOR AN "OUTSIDER".
LOW SCORE : INDICATES THE COUNTRY DOES NOT REINFORCE THE CONCEPT OF LONG-TERM, TRADITIONAL ORIENTATION. IN THIS CULTURE, CHANGE CAN OCCUR MORE RAPIDLY AS LONGTERM TRADITIONS AND COMMITMENTS DO NOT BECOME IMPEDIMENTS TO CHANGE.

USING CULTURE AS A TOOL OF ORGANISATIONAL CHANGE

CULTURE HINDERS AND/OR ENABLES CHANGE IN SEVERAL WAYS, WHICH ARE CRUCIAL TO UNDERSTAND IF YOU WANT TO CREATE TANGIBLE AND LASTING CHANGE

Pros:

HOFSTEDE PROVIDED A DEFINITION OF CULTURE AND HOW CULTURE CAN BE MEASURED. HIS RESEARCH SHOWED THAT CULTURAL DIFFERENCES MATTER. MANAGERS IN INTERNATIONAL ORGANISATIONS OPERATE ACCORDING TO THEIR COUNTRY'S VALUES, RATHER THAN TO THE ORGANISATION'S CULTURE. EMPLOYEES FROM RELATED NATIONAL CULTURES WORK IN SIMILAR FASHIONS, THEREBY REDUCING THE CHANCE OF CONFLICTS. HOFSTEDE'S MODEL PROVIDES MANAGERS OF CROSS-CULTURAL RELATIONS A TOOL TO HELP THEM UNDERSTAND DIFFERENCES IN VALUE SETS AND BEHAVIOUR. THE MODEL NEGATES THAT ONE SET OF PRINCIPLES IS UNIVERSALLY APPLICABLE BY CONFIRMING THAT THERE ARE MULTIPLE WAYS OF STRUCTURING ORGANISATIONS AND INSTITUTIONS. AN ORGANISATION'S WIDER SOCIAL AND CULTURAL ENVIRONMENT PLUS ITS TECHNOLOGY DETERMINES THE LEVEL OF BUREAUCRACY AND CENTRALISATION (SCOTT, HOFSTEDE).

Cons:

WHEN HOFSTEDE'S FIRST RESULTS WERE CRITICISED BY ASIAN SCHOLARS, HE ADDED TIME ORIENTATION AS A FIFTH DIMENSION THEREBY RAISING DOUBTS ABOUT WHETHER THE TYPOLOGY ITSELF WAS EXHAUSTIVE.
CULTURE IS A FAR TOO COMPLEX AND MULTIFACETED TO BE USED AS A STRAIGHTFORWARD ORGANISATIONAL CHANGE CONTROL. "YOU DO NOT CONTROL CULTURE, AT BEST YOU SHAPE IT" (GREEN).