Culture and Management & How Cultural Differences Affect Organizations 1

Management, Globalization, Global Management and its challenges Managing in the global economy involves understanding the following inter-related themes: – Management involves getting things done through other people – Globalization represents the emerging of a single global economic system in which the creation of economic value is shared by a mix of stakeholders from a range of economic, social, and culturally unique countries – Global management involves getting things done through other people who are part of a national economy that can often be expected to differ economically, socially and culturally 2

Going Global: Phases of Development Domestic phase Multidomestic phase Multinational phase Global phase 3

Multiple Management Perspectives Parochial managers: Management practices and the world is viewed from the point of view of their OWN cultural perspective only. Ethnocentric managers: Acknowledge cultural differences, but believe that their culture, value system, and ways of doing things is best. Diversity is resisted. Geocentric Managers: Best fit or contingency approach will be adopted by managers. Homogeneity is encouraged. 4

A quick word about: Organizational Culture vs. National Culture The collective mental programming of the people of any particular nationality Organizations operate within a national culture context and national culture influences organizational culture 5

Models of National Culture Additional Ref : Morden, Tony. (1999). Models of National Culture – A Management Review. Cross-Cultural Management, Vol 6, No Single Dimension Models – CONTEXT: High and Low Context Cultures (Hall) – TIME: Monochronic and Polychronic Cultures (Lewis) – TRUST: Fukuyama’s Analysis of Trust 2.Historical Social Models – The Euromanagement Study – South East Asian Management 3.Multiple Dimension Models – Hofstede – Kluckhohn & Strodtbeck – Hampden-Turner & Trompenaars (7 dimensions) – Lessem & Neubauer (European management systems) 6

HOFSTEDE’s DIMENSIONS 1.Collectivism vs. Individualism 2.Power Distance 3.Uncertainty Avoidance 4.Femininity vs. Masculinity 5.Time Orientation 7

Multiple Dimension Models of National Culture Kluckhohn & Strodbeck: – 1. How people see themselves – 2. Peoples’ relationship to the world – 3. Human relationships: Individualism or Collectivism – 4. Activity: Doing or Being – 5. Time: Present, Past, & Future – 6. Space 8

Trompenaars: The Seven Dimensions of Cross-Cultural Management: THREE Universally shared social problems ADDRESSED BY …….SEVEN Fundamental Dimensions of Culture: 1.Relationship with other people a. Universalism vs.particularism b. Collectivism vs individualism c. Neutral vs. affective d. Diffuse vs. specific e. Achievement vs. ascription 2.Relationship to time (monochronic vs polychronic) 3.Relationship with nature (inner- vs. outer-directed) 9

Lessem & Neubauer (European management systems) Pragmatism Idealism Rationalism Humanism 10

Work behavior varies across cultures McGregor’s Theory X and Y Managers can have different kinds of assumptions about workers that will influence managerial behavior. – Task and Relationship oriented cultures – Managers experts or problem solvers – Individualism and Collectivism – Rules and Relationships 11