Culture and Organizations

Theories of Organization  A quest for the most efficient way to organize human effort for maximum productivity.  It was Weber, the German sociologist, who at the turn of the 20th century formulated the concept of a bureaucracy as the most efficient way to organize human effort.  Organizations allow for impersonality. This represented a sharp departure from feudalistic and family-type businesses where leadership is inherited.

Subordinates were more like servants than respected members of the organization. According to Weber, by eliminating personal and non-rational considerations, a bureaucracy allowed for efficiency based on rationality.

Classical Theories The classical theories that followed retained much of what Weber outlined, as reflected in the following principles:  Unity of Command Subordinates should have one and only one immediate superior.

 The Scaler Principle This principle limits communications to people in a direct hierarchical relationship. These classic theories of organization totally ignored the psychology of its members. In fact, theories of human relations were developed in part in reaction to the implication of these theories.

Mayo and Human Relations  Mayo (1945) was among the first proponents of human relations in industry. He argued that many of the problems of organizations, including inefficiency, conflict, and alienation, occur because organizations do not take into account the attitudes and feelings of its members.

 The famous Hawthorne experiment demonstrated Mayo’s point quite well.  The Hawthorne experiment also demonstrated that group and social forces more than financial incentives and physical conditions of work are important determinants of worker productivity.

 Psychologists proposed the conception of an organization member as an individual with social needs and needs for self- actualization in addition to the simple need for economic security.  Also, in direct opposition to the early theories, psychologists disagreed that workers prefer to avoid work and lack capacity for self-direction.

 The first industrial/organizational psychologists asserted that members of an organization represented an untapped source of technical and intellectual skills that night contribute substantially to the organizational effort.

Organizational Culture  This line of thinking changed traditional concepts of authority and leadership to include participative procedures and leadership by peers in groups as means of fostering self-direction and of tapping the latent human resources available in every organization.

ORGANIZATIONAL CULTURE AND ORGANIZATIONAL CLIMATE

 Organizational culture: The meaning and information system shared within an organization and transmitted across successive generations of members, that allows the organization to survive.  Organizational climate: The shared perception of organizational policies, practices, and procedures.

Organizational Culture  Complexity – degree to which organizations foster a differentiation task and activities.  Formalization – structures and rules for organizational operations.  Centralization – degree to which organizations concentrate or centralized their operations and decision-making in a limited number of business units or people.

“National Character” of Organizations  Latin Type  Anglo-Saxon Type  Third World Type  Latin – classic bureaucracy, centralization of power and decision-making, and many hierarchical levels.

“National Character” of Organizations  Anglo-Saxon – less centralization, more diffusion of power and decision-making, and less hierarchical levels.  Third World – greater centralization and decision-making, less formalization of rules, and more paternalistic.

Transactional Versus Transformational Organizational Culture  Transactional organizations maintain the status quo, and are based on pre- established rules and structures, BUT inspire limited levels of commitment and motivation.  Transformational organizations are supportive of innovation, transformation and change.  Transformational cultures encourage and support innovation and open discussion of issues and ideas so that challenges become opportunities rather than threats.

CULTURAL DIFFERENCES IN WORK-RELATED VALUES

 Best-known study of work-related values conducted by Hofstede  Data from 72 countries  Hofstede’s four dimensions: Power Distance, Uncertainty Avoidance, Individualism-Collectivism, and Masculinity-Femininity

Power Distance Degree to which different cultures encourage or maintain power and status differences between interactants  High Power Distance:  develop rules, mechanisms, and rituals that serve to maintain and strengthen status relationships among members  foster organizations with greater centralization of organization and process, taller organizational pyramids, larger wage differentials, etc.

Uncertainty Avoidance  Degree to which different cultures develop ways to deal with anxiety and stress of uncertainty  High Uncertainty Avoidance:  develop rules that are mandated and become part of company rubric and normal way of operating  Companies are rule-oriented  Greater job stress

Individualism-Collectivism  Collectivistic cultures  Foster more compliance with company policies and more conformity in group behavior  Foster greater degree of reliance on group work and group orientation to company and organizational tasks  Value harmony within groups and likely to engage in behaviors that ensure harmony  BUT freedom, independence, and initiative are normally frowned upon

Masculinity-Femininity  Degree to which cultures maintain differences between the sexes in work-related activities  High Masculinity-Femininity:  Managers value leadership, independence, and self-realization  Regard earning, recognition, advancement, and challenge as more important  Organizational interests, needs, and goals viewed as legitimate reasons to interfere in personal lives of employees  BUT fewer women in better-paid jobs  Greater job stress

Confucian Principles  Every Culture has its Gold Standard for promoting worker productivity.  We have and often invoke the Protestant Work Ethic principle.  The Chinese are guided by the teachings of Confucius, as follows:

Confucian Principles  Unequal status relationships lead to a stable society.  The family is typical of all organizations.  Virtue in life consists of working hard, acquiring useful skills and as much education as possible, not being a spendthrift, and persevering when faced with difficult tasks.

Culture and Negotiations  Negotiation always involves two individuals (usually representing groups) exchanging a series of offers.  Negotiations are not limited to direct “deal making” over fixed resources.  Often we engage in negotiation to resolve disputes and to make decisions in teams.

Culture and Negotiations  How does culture influence negotiation?  It comes down to values. Cultural values guide us in determining what issues are more or less important and also influence negotiators’ interests and priorities.  Culture is always at the negotiation table.

Negotiation  Negotiation in US is a business; communication is direct and verbal  Negotiation processes in other cultures are different  “diplomatic dance” between Arabs and Americans (due to cultural differences in personal space)  Cultural differences between US and Japan  Use of “yes”  Role of entertainment and getting to know each other  Direct vs. indirect communication styles

Overseas Assignment  Difficulty arises because of limited language skills and different expectations  Different views of women  Adjustment problems occur because of differences in lifestyle, customs, and behaviors  Positive aspects of overseas assignment: learn new skills, broaden perspective

Working with an Increasingly Diverse Workforce Population  Many problems that arise when Americans go overseas occur when foreign workers come to US  Different expectations, customs, and rituals  Different ways of doing business  Cultural differences in ways of handling disagreement  Role of Individualism-Collectivism and Power Distance  Similar issues when dealing with diverse American workforce

Working with an Increasingly Diverse Workforce Population  Many companies overcome these challenges by:  Making explicit communication styles, decision making, productivity, and worker behaviors important for success of company  Training employees in intercultural issues