Contd.

Product/market Characteristics: The need to protect patents or standardize products will influence the degree of information sharing. Regulation: Impacts on market conditions, such as level of competition which in turn influences customer orientation. Technology: Government regulation determines degree to which technology is developed and protected. Sources of Competitive Advantage: Concerns for efficiency over customer satisfaction, or cost effectiveness over quality, may predominate in heavy industries over service industry. Need for resources or different sorts of capital- financial human, intellectual- drive cultural differences in capital, labour and knowledge-intensive industries.

Contd.

Interaction Effects: National culture can interact with industry culture to provide competitive advantage. PROFESSIONAL CULTURE: Management as a profession. Require judgment through intensive training, supervision and socialization. Harvard, MIT, INSEAD Organizations are becoming network of specialists Generalists/Specialists, Scientists, Research Engineers and Managers

Reasons for Differences in Corporate Culture

Role of Founder: Influence through their values and beliefs. Leaders: Through their vision, innovativeness etc. Administrative Heritage: Different structures, standard operating procedures or routines that evolve over a time shape culture by prescribing specific behaviour and reinforcing certain values and beliefs. Stages of development: Technology driven to market driven

Contd..

Nature of products: Market driven, customer oriented, premium pricing. Interaction effects: LVMH- French, Audi BMW, Merc- German MacDonalds- American Disney in Japan vs Disney In France French resented Social Control, Smiling faces, friendly service, the obsession with cleanliness and efficiency not liked by French employees. Export of logos, images or company heroes may be interpreted in ways not intended

Culture and Organization

The culture free argument is that national culture influence the way people relate to each other whereas organizational structure is determined by size and technology. Taking a historical perspective of how best to organize- Max Weber (German) bureaucracy, Henri Fayols (French) administrative model, and Fredrick Taylors (American) scientific management- all reflect societal concerns of the time and cultural backgrounds of the individuals. Influence can be seen- Emphasis on structure & competence German; Emphasis on social systems

CONTD.

Roles and relationships (Unity of Command)-French & emphasis on task systems or machine model of organization (reengineering) Performance mngt., participative mngt., team approach, and job enrichment have their roots in particular historical and societal context- scientific management in the US Human relations, brought about by Hawthorne studies (1930) in the US Socio technical brought by the Tavistock studies of the coal mines in the UK (1930)

CONTD.

Human Resource brought about in Sweden (1970) with Saab Scanias and Volvos redesign of auto assembly into autonomous teams. These models have diffused across countries at different rates and different ways. For this reason the historical & societal context needs to be considered to understand adoption and diffusion of different forms of organization across countries. Use Hofstedes findings Stevens Studies describe the implicit model of the organization held by each culture:

Contd.

French- organization represent Pyramid of Peopleformalized and centralized. The CEO- provide coordination & make key decisions-high level of analytical & conceptual ability-need not be industry or company specific. German- Well Oiled Machine- formalized but not centralized-rules and regulations are more formal, and task roles and responsibilities are more clearly defined- no need for a boss-Managers cite structures as key to success. Organized by functions. Sometimes called Chimney organization. Top mngt. Consist of a managing board Vorstand

Contd.

British- Village Market- neither formalized nor centralizedneither hierarchy nor the rules, but the demands of the situation determine structure. British managers more freedom and discretion not limited to their technical competence. Flexibility and need for persuasion and negotiation skills to achieve cooperation. Asia- Family model- more hierarchic less formalized, exception of Japan. The primary cultural determinants related to relationship between people in terms of power and status & relationship with nature. The underlying cultural assumptions- beliefs-observable artifacts.

The Meaning of Organization

Andre Laurent argues that country differences in structure reflect different conceptions of what is an organization. Organizations as Hierarchical Systems- difficult to build a matrix system Not willing to bypass or go over or around the boss Boss should have precise answer to most of the questions Asian and Latin managers expect boss to demonstrate expert knowledge, if efficiency lies in bypassing the hierarchical lines then something wrong with the hierarchy. Scandinavian and Anglo managers find it perfectly normal to go directly to anyone to accomplish the task. They believe there cannot be precise answer as world is to complicated for that. precise answers do not develop the capacity of subordinates to solve problems

Contd.

Organization as Political Systems: Managers should play impt. Political role in society and negotiate within the organization. Obtaining power more important than task performance Latin and European managers adhere more to this than Nordic and Anglo managers. Organizations as Role Formalization: Managers prefer detailed job description and well defined roles and functions Nordic and Anglo managers not comfortable with this as they feel world is too complex to clearly define roles and functions. It also reduces flexibility and hinders achievement of coordination. Therefore Laurent concluded that conception was either Instrumental or Social. Difference between Latin European and Anglo-Saxons.

Contd.

Constructing Cultural profiles enables one to appreciate the impact of culture on management as multidimensional. It would therefore be a mistake to base a prediction regarding structure or process on a single cultural dimension. Culture and Process Policies and Procedures: The formalization and standardization of policies and procedures may reflect low tolerance for uncertainty. The US ranks low in uncertainty avoidance European managers find: too formal in reporting and volumes of written policies.

Contd.

This may be because of the contractual view of employment, instrumental view of organization and low context communication. Organization is thought to exist independently from its members- may seem contrary to individualism but standardisation allows indiv. To move easily in and out of jobs/organization and guarantees their career movement in village market. Commitment to universalism- all people be treated equally. British and German Firms- Germany high on uncertainty avoidance, Britain low on the same

Yet detailed job description in Britain. Germans are specialists and tend to stay longer in the job so job description well internalized. British managers higher tolerance for mismatch between written expectation and actual responsibilities. Germans feel a threat to flexibility and feel uncomfortable with any divergence. Procedures and job descriptions less explicit where communication is more embedded in relationships and in situation (high context). Japanese managers tend to have group accountability.

Systems and Controls: Reflect differences in cultural assumption regarding: Relationship with nature (uncertainty & control) Relationship with People (in terms of power and human nature) Different types of control are also visible across culturesInput, Throughput and Output Planning practices also reflect underlying cultural assumption Eg Britain more strategic in focus, more long term, more participation. Germany: more operational, more short term, with little participation

France: planning more short term, more administrative and less participative Information and Communication: What kind of information is sought or heeded, how information circulates and what information is shared with whom, reflect cultural preferences for hierarchy, formalization and participation Eg. Electrolux taking over Zanussi Office design, building layout and information technology can encourage managers to share information or keep it to themselves.

Can facilitate whether communication channels are open and multiple or limited to one-to-one basis, serial and secretive. Decision Making: Culturally rooted. 1. Who is making the decision 2. Who is involved in the process 3. Where decisions are made 4. nature of decision making 5. different time horizons Japanese Ringi System: petitions are circulated requiring individuals to sign on. Does not signify approval, but means support. Opinions of superiors more implicit than explicit. This reconciles collectivism and hierarchy.

Cultural preferences for hierarchy, and formalization, assumptions regarding time and change are important considerations in how and how quickly decisions will be made. Participation may be for: preserving everyones rights Preserve group harmony and relationships Promote social welfare Results in different cultural reasons for empowerment: right to negotiate, right to decide empowerment signifies power sharing in order to arrive at consensus regarding collective wellbeing. It can also be distributive justice eg. US

Transferability: Cultural differences undermine the best intentions and the assumed rationality of best practices. NIH not invented here syndrome