Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., 2000 Chapter 7 ORGANIZATIONAL CULTURES AND DIVERSITY

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc, Chapter 2 THE NON ECONOMIC ENVIRONMENT FOR INTERNATIONAL MANAGEMENT

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Definition and Characteristics  Organizational Culture: Observed behavioral regularities, as typified by common language, terminology, and rituals –Norms  amount of work to be done  degree of cooperation between management and employees –Dominant values that the organization advocates  high product and service quality  low absenteeism

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Organizational Culture Continued –A philosophy regarding how employees and customers should be treated –Rules that dictate the do’s and don’ts of employee behavior relating to:  productivity  customer relations –Organizational climate  How participants interact with each other, conduct themselves with customers…

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Organizational Cultures in MNCs  Aspects in determining MNC organizational culture:  The relationship between the employees and their organization  The hierarchical system of authority that defines the roles of managers and subordinates  The general views that employees hold about the MNC’s purpose, destiny, goals, and their places in them  4 types of organizational cultures:  Family  Eiffel Tower  Guided Missile  Incubator

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Organizational Cultures Equity Fulfillment-orientedProject-oriented culture culture INCUBATORGUIDED MISSILE PersonTask FAMILY EIFFEL TOWER Power-oriented Role-oriented culture culture Hierarchy

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Family Culture Strong emphasis on the hierarchy and orientation to the person  headed by a leader who is regarded as a caring parent  personnel look to leaders for both guidance and approval in exchange for looking after them  characterized by traditions, customs, and associations that bind together the personnel and make it difficult for outsiders to become members  EX.) Turkey, Venezuela, China, and Singapore

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Eiffel Tower Culture Strong emphasis on the hierarchy and orientation to the task -- impersonal and efficient  Jobs are well defined  everything is coordinated from the top.  Person holding top position could be replaced at any time without having an effect on the work being done  assessment centers, appraisal systems, training and development programs, and job rotation are common in managing human resources.  Ex.) North American and Northwest European countries

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Guided Missile Culture Strong emphasis on equality in the work place and orientation to the task  Teams and project groups are common  Formal hierarchical considerations are given low priority and individual expertise is of greater importance  360-degree feedback systems are common  Change comes quickly  Ex.) United States and United Kingdom

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Incubator Culture Strong emphasis on equality and personal orientation  based on the concept that organizations are secondary to the fulfillment of the individuals within them  Little formal structure -- participants are there to perform roles  This culture is composed of creative work teams  Change is fast and spontaneous  Leadership is achieved, not gained by position  Ex.) entrepreneurial companies

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Managing Multiculturalism and Diversity  Phases of Multicultural Development  Phase I - Domestic corporations  Phase II - International corporations  Phase III - Multinational corporations  Phase IV - Global corporations

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Types of Multiculturalism –Domestic Multiculturalism –Group Multiculturalism  Homogeneous groups  Token groups  Bicultural groups  Multicultural groups  Potential Problems Associated with Diversity  Mistrust of others  Perceptions and preconceived stereotypes  Inaccurate biases  Miscommunication (misunderstandings & different uses of time)

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc.,  Advantages of Diversity  Generation of more and better ideas  Prevents “groupthink”  Culturally diverse groups can enhance creativity, lead to better decisions, and result in more effective and productive performance

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Using the Proper Guidelines 1. Team members must be selected for their task-related abilities and not solely based on ethnicity -- - Routine Task - want homogeneity. Innovative task - want multiculturalism 2. Team members must recognize and be prepared to deal with their differences --. recognize their own stereotypes 3. diverse teams tend to have more difficulty agreeing on their purpose and task than members of homogenous groups. the team leader must help the group to identify and define its overall goal

Irwin/McGraw-Hill© McGraw-Hill Companies, Inc., Members must have equal power so that everyone can participate in the process 5. all members have mutual respect for each other 6. Managers must give positive feedback on processes and output