1 Chapter Nine Cultural Asymmetries Between Headquarters and Foreign Subsidiaries and Their Consequence on the Integrative Role of Information Technology

2 Agenda  Introduction, Culture  The Culture Gap Problem  National Culture  Organizational Culture  IS Culture  Gaps everywhere

3 Introduction  Growing Global Economy  Multinational Locations  Social Systems & Work Practices  International Accommodation

4 National Levels of “Culture” Head Office Subsidiary Models Hofstede Cooper Cooper 2 Environmental context Business Context Vocational Context Organi- zational Organi- zational Information Systems Information Systems

5 Interaction of Levels of “Culture” National Culture Organizational Culture IS Culture Higher-Order Influences In certain cultures, will there be unique interactions of organizational and IS culture? At certain stages of IS culture, will there be unique interactions between national and organizational culture? In certain organizations are there unique interactions between IS and organizational cultures?

6 Where Does All This Come From? Identity: Need For Formalization Permanence: Need For Control Focus on things and entities Focus on things and relationships Entity has need for Identity & Permanence All human societies from partnerships to work groups to organizations to regions to nations seek to affiliate and thus have these needs These needs result in a desire to define the group relative to others and thus create an acquired need for formalization of process (rites, rituals, membership) and control (relationships, hierarchy)

7 Problems Transferring Technologies to Foreign Subsidiaries  Technical Factors: National, regional  National Culture Differences  IT Culture Differences  Specific Organizational Barriers  Psychological Barriers  Others?

8 National Culture  Influences Human Behavior in many ways  Hard to define  Hofstede – a set of mental programs that control an individual’s responses in a given context: a psychological approach  Erez & Earley – shared values of a particular group of people  Others point to cultural “artifacts”, symbols, myths, legends, shared tales and modes of interaction

9 Classifying Culture & Identifying Dimensions  Difficult & Controversial  Hofstede study of IBM (1980 and later*)  116,000 Questionnaires  40 Countries, later over 60.  Identified four dimensions  He later added one more (temporal orientation)  Alternatives have been proposed, but Hofstede remains the framework of choice * See supplemental lecture

10 Four Dimensions of National Culture  Power Distance: Formalization of social differences based on authority and power  Uncertainty Avoidance: Risk-taking  Individual-Collectivism: The role of individuals  Masculinity-Femininity: Assertiveness vs. nurturing (not actually gender linked)

11 National Culture Seen Through a Two-Dimensional Lens Low Inequality High Power Distance Uncertainty Avoidance Low Formalization High Machine Pyramid Market Family Cultures displaying High degree of Centralization and higher level of formalization Detractors would insist this grid is “Eurocentric ” or worse!

12 Organizational Culture - Defined  Smircich – set of key values, guiding beliefs, and understandings that are shared by members of an organization.  Schein – pattern of basic assumptions that has worked well enough to be valid, and therefore to be taught to new members as the correct way to perceive, think, and feel about organizational problems

13 Organizational Culture - Expressed  Deal & Kennedy  Layers of Onion leading to Core Values  Four Categories Symbols, or the words or objects that carry a specific meaning within the organization Heroes, or the persons highly prized as models of behavior, who enact rituals Rituals, or the collective activities that are socially essential in an organization, embodying values Core Values

14 Organizational Culture – Expressed cont’d  Many ways to define and express culture  Not much agreement  Hard to change  Organizational culture has little long-term effect on individuals, but obviously has immediate impact on behavior

15 Information Culture  Set of values and practices shared by members of organization involved in information activities  Practices Include:  Exclusive use of Windows Environment  Requirement for IS staff approval for all PC purchases  Establishes Boundaries for IT within the firm  Influences IS Function within business  If the IS Culture does not match corporate goals and objectives – tendency to outsource

16 Organizational Culture Viewed Through a Conflict Lens Productivity Survival Stability Human Relations Internal External Response Focus Order Flexibility Response Mode Where are the threats coming from? What is Our Response Strategy?

17 IS Practices Seen through Hofstede’s Lens Improve existing operations Less preference for re- engineering Difficulty in balancing cen- tralized and decentralized org’ns Automation of routine processes Focus on accounting, mfg, op’ns Top-down control Limited end-user involvement Little emphasis on distributed environment Scanning for opportunities End-user participation Use of teams and groups Connectivity Wide-spread access Distributed processing Innovation Highly centralized organizations Limited end-user involvement Limited networking Preference for centralized data storage Lack of equality among team members Machine Pyramid Market Family Low Power Distance High Low Uncertainty Avoidance High Who lives here? Who lives here?

18 IS Culture - Summary  Important in understanding IS Strategy  If HQ is one archetype and Subsidiary is in another, problems may occur  Subsidiary may need system to focus on different aspect of IS with different practices.  Question: Is IS Culture sensitive to Organizational Culture? To national culture? To the technology? To anything?

19 Exploring Ways National Culture Influences IS Culture  Issues associated with National Culture  Role of Organizational Culture  Information Systems Culture  Suggestions for managing process of introducing systems into the different cultures.

20 Organizational Culture Gap Factors HQ National Culture HQ IS Culture Host National Culture Host IS Culture HQ Competi- tive Env’t HQ Business Strategy & Structure HQ Portfolio Of Tasks Host Competi- tive Env’t Host Business Strategy & Structure Host Portfolio Of Tasks Information Culture Gap

21 How does this all fit together?  Establish link between national culture and IS culture  Attempt to map Hofstede’s model of National Culture to Cooper’s Competing Value Model  No direct relationship between national culture and organizational archetypes  Used independently each model still valid

22 Implications for Management  Your discussion, please?