1. Chapter Copyright© 2007 Thomson Learning All rights reserved 14 Motivation in Multinational Companies

2. Copyright© 2007 South-Western/Thomson Learning All rights reserved Learning Objectives Know how people from different nations perceive the basic functions of working Know how people from different nations view the importance of working Understand how the national context affects the basic processes of work motivation Know how people from different nations perceive the basic functions of working Know how people from different nations view the importance of working Understand how the national context affects the basic processes of work motivation

3. Copyright© 2007 South-Western/Thomson Learning All rights reserved Learning Objectives Be able to apply common theories of work motivation in different national context Be able to design jobs for high motivational potential in different national cultures Be able to apply common theories of work motivation in different national context Be able to design jobs for high motivational potential in different national cultures

4. Copyright© 2007 South-Western/Thomson Learning All rights reserved Motivation in Multinationals Multinational managers must understand how to motivate international employees Multinationals face an array of challenges to motivate a workforce in the face of a rapidly changing labor market Multinational managers must understand how to motivate international employees Multinationals face an array of challenges to motivate a workforce in the face of a rapidly changing labor market

5. Copyright© 2007 South-Western/Thomson Learning All rights reserved How Important is Work in People’s Lives? Work centrality: overall value of work in a person’s life - Work compared to other activities such as leisure and family - Higher levels of work centrality match average number of hours worked per week - High levels of work centrality may lead to dedicated workers Work centrality: overall value of work in a person’s life - Work compared to other activities such as leisure and family - Higher levels of work centrality match average number of hours worked per week - High levels of work centrality may lead to dedicated workers

6. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.1: Differences in Work Centrality in Seven Countries

7. Copyright© 2007 South-Western/Thomson Learning All rights reserved How Important is Work in People’s Lives? Work obligation norms -Societies that have high work obligation norms expect their citizens to view work as an obligation or a duty -These societies are more likely to have individuals adhering to this norm by working longer Work obligation norms -Societies that have high work obligation norms expect their citizens to view work as an obligation or a duty -These societies are more likely to have individuals adhering to this norm by working longer

8. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.2: Levels of Work Obligations in Various Societies

9. Copyright© 2007 South-Western/Thomson Learning All rights reserved What Do People Value in Work? Extrinsic work values: individuals express preference for security from their jobs with such aspects as income, job security, and less demanding work Intrinsic work values: express preferences for openness to change, the pursuit of autonomy, growth, creativity, and the use of initiative at work Extrinsic work values: individuals express preference for security from their jobs with such aspects as income, job security, and less demanding work Intrinsic work values: express preferences for openness to change, the pursuit of autonomy, growth, creativity, and the use of initiative at work

10. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.3: Extrinsic Work Values for Selected Countries

11. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.4: Intrinsic Work Values for Selected Countries

12. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.5: Priorities Given to Different Job Characteristics in Selected Countries

13. Copyright© 2007 South-Western/Thomson Learning All rights reserved What Do People Value in Work? In some societies, work is very central and absorbs much of a person’s life All people hope to receive certain benefits from work Societies differ in the degree to which they regard work as an obligation to society Many of the emerging economies that value extrinsic work values such as income and job security also place high value on intrinsic work values In some societies, work is very central and absorbs much of a person’s life All people hope to receive certain benefits from work Societies differ in the degree to which they regard work as an obligation to society Many of the emerging economies that value extrinsic work values such as income and job security also place high value on intrinsic work values

14. Copyright© 2007 South-Western/Thomson Learning All rights reserved What Do People Value in Work? The first key to successful motivational strategies is understanding the differences regarding how people view work among countries

15. Copyright© 2007 South-Western/Thomson Learning All rights reserved The Basic Work-Motivation Process Motivation: a psychological process resulting in goal- directed behavior that satisfies human needs Need: feeling of deficit or lacking Goal-directed behavior: one that people use with the intention of satisfying a need Motivation: a psychological process resulting in goal- directed behavior that satisfies human needs Need: feeling of deficit or lacking Goal-directed behavior: one that people use with the intention of satisfying a need

16. Copyright© 2007 South-Western/Thomson Learning All rights reserved Work Motivation and the National Context Reinforcement: reactions to a person’s behavior that encourage the person to continue the behavior E.g., bonus pay to encourage behavior Punishment: consequences of a person’s behavior that discourage the behavior E.g., docking pay to discourage behavior Reinforcement: reactions to a person’s behavior that encourage the person to continue the behavior E.g., bonus pay to encourage behavior Punishment: consequences of a person’s behavior that discourage the behavior E.g., docking pay to discourage behavior

17. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.6: The Basic Work Motivation Process and the National Context

18. Copyright© 2007 South-Western/Thomson Learning All rights reserved National Context and Work Motivation Culture and social institution influence - They influence the priority people attach to work - They define what behaviors are legitimate ways to satisfy goals - National context also influences reactions to goal- directed behaviors at work Culture and social institution influence - They influence the priority people attach to work - They define what behaviors are legitimate ways to satisfy goals - National context also influences reactions to goal- directed behaviors at work

19. Copyright© 2007 South-Western/Thomson Learning All rights reserved Theories of Work Motivation in the Multinational Context Two basic types of motivational theories - Need theory: assumes that people can satisfy basic human needs in the work setting - Process theory: arising from needs and values combined with an individual’s beliefs regarding the work environment Two basic types of motivational theories - Need theory: assumes that people can satisfy basic human needs in the work setting - Process theory: arising from needs and values combined with an individual’s beliefs regarding the work environment

20. Copyright© 2007 South-Western/Thomson Learning All rights reserved Theories of Work Motivation in the Multinational Context Four need theories of motivation - Maslow’s Hierarchy of Needs - ERG theory - Motivator-hygiene theory - Achievement motivation theory Four need theories of motivation - Maslow’s Hierarchy of Needs - ERG theory - Motivator-hygiene theory - Achievement motivation theory

21. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.7: Need Theories of Motivation

22. Copyright© 2007 South-Western/Thomson Learning All rights reserved Maslow’s Hierarchy of Needs Theory States that people have five basic types of needs - Physiological, Security, Affiliation, Esteem, and Self-actualization The needs follow a basic hierarchy People first seek to satisfy lower needs Once lower need is satisfied, it no longer motivates People try to satisfy higher needs States that people have five basic types of needs - Physiological, Security, Affiliation, Esteem, and Self-actualization The needs follow a basic hierarchy People first seek to satisfy lower needs Once lower need is satisfied, it no longer motivates People try to satisfy higher needs

23. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Maslow’s Hierarchy of Needs and Country Level Measures

24. Copyright© 2007 South-Western/Thomson Learning All rights reserved Alderfer’s ERG Theory Simplified hierarchy of needs, including existence needs, relatedness needs, and growth needs - Frustration of a need motivates behavior to satisfy the need. - People seek to satisfy higher and lower level needs. - If people cannot satisfy higher needs, they will try to satisfy lower level needs. Simplified hierarchy of needs, including existence needs, relatedness needs, and growth needs - Frustration of a need motivates behavior to satisfy the need. - People seek to satisfy higher and lower level needs. - If people cannot satisfy higher needs, they will try to satisfy lower level needs.

25. Copyright© 2007 South-Western/Thomson Learning All rights reserved Motivator-Hygiene Theory Assumption that a job has two basic characteristics: motivators and hygiene factors - Job content—motivating factors E.g., challenging job - Job context—hygiene factors E.g., good benefits Assumption that a job has two basic characteristics: motivators and hygiene factors - Job content—motivating factors E.g., challenging job - Job context—hygiene factors E.g., good benefits

26. Copyright© 2007 South-Western/Thomson Learning All rights reserved Achievement-motivation Theory Suggestion that only some people have the need to win in competitive situations or to exceed a standard of excellence - Three key needs: achievement, affiliation, and power - High achievement people have needs to win and to set own goals and seek challenging situations Suggestion that only some people have the need to win in competitive situations or to exceed a standard of excellence - Three key needs: achievement, affiliation, and power - High achievement people have needs to win and to set own goals and seek challenging situations

27. Copyright© 2007 South-Western/Thomson Learning All rights reserved Needs and the National Context: Lessons People from different nations do not give the same priorities to the needs that might be satisfied at work Even with similar needs, they may not give the same level of importance of satisfying these needs People from different nations do not give the same priorities to the needs that might be satisfied at work Even with similar needs, they may not give the same level of importance of satisfying these needs

28. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.9: Rankings of the Importance of Job-Related Sources of Need Satisfaction for Seven Countries

29. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.10: Hofstede’s Dimensions of National Culture and Motivators at Work

30. Copyright© 2007 South-Western/Thomson Learning All rights reserved Applying Need Theories in Multinational Settings Identify the basic functions of work in the national or local culture Identify the needs considered most important by workers in the national or local culture Sources of need fulfillment may differ for the same needs Understand limitations of available jobs to satisfy needs Identify the basic functions of work in the national or local culture Identify the needs considered most important by workers in the national or local culture Sources of need fulfillment may differ for the same needs Understand limitations of available jobs to satisfy needs

31. Copyright© 2007 South-Western/Thomson Learning All rights reserved Process and Reinforcement Theories of Motivation: Expectancy Theory Expectancy theory - Assumes that part of motivation is an individual’s desire to satisfy needs - People’s beliefs regarding how much their efforts at work will eventually satisfy their needs Expectancy theory - Assumes that part of motivation is an individual’s desire to satisfy needs - People’s beliefs regarding how much their efforts at work will eventually satisfy their needs

32. Copyright© 2007 South-Western/Thomson Learning All rights reserved Expectancy Theory Three factors - Expectancy: an individual’s belief that his or her effort will lead to some result - Valence: the value attached to the outcome of efforts - Instrumentality: the links between early and later results of the work effort Motivation = Expectancy x Valence x Instrumentality Three factors - Expectancy: an individual’s belief that his or her effort will lead to some result - Valence: the value attached to the outcome of efforts - Instrumentality: the links between early and later results of the work effort Motivation = Expectancy x Valence x Instrumentality

33. Copyright© 2007 South-Western/Thomson Learning All rights reserved Applying Expectancy Theory in Multinational Settings Two key issues - Identify valued outcomes of work - Use culturally appropriate ways to convince employees that their efforts will lead to desirable ends Two key issues - Identify valued outcomes of work - Use culturally appropriate ways to convince employees that their efforts will lead to desirable ends

34. Copyright© 2007 South-Western/Thomson Learning All rights reserved Equity Theory Focuses on the fairness that people perceive in the rewards that they receive for their efforts at work - There are no absolute standards for fairness in the input/output (effort/reward) equation. - People compare themselves to others and adjust their input (effort). Focuses on the fairness that people perceive in the rewards that they receive for their efforts at work - There are no absolute standards for fairness in the input/output (effort/reward) equation. - People compare themselves to others and adjust their input (effort).

35. Copyright© 2007 South-Western/Thomson Learning All rights reserved Applying Equity Theory in Multinational Settings Equity norms vary Three principles of allocating rewards - The principle of equity (based on contributions) Prevails in individualistic cultures - The principle of equality (based on equal division of rewards) More likely in collectivistic cultures - The principle of need (based on individual needs) Equity norms vary Three principles of allocating rewards - The principle of equity (based on contributions) Prevails in individualistic cultures - The principle of equality (based on equal division of rewards) More likely in collectivistic cultures - The principle of need (based on individual needs)

36. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.11: Rewards from Peers for Contributions to a Student Group Project

37. Copyright© 2007 South-Western/Thomson Learning All rights reserved Goal Setting Theory Assumption that the mere existence of a goal is motivating The principles of goal setting - Set clear and specific goals - Assign difficult but achievable goals - Increase employee acceptance of goals - Provide incentives to achieve goals - Give feedback on goal attainment Assumption that the mere existence of a goal is motivating The principles of goal setting - Set clear and specific goals - Assign difficult but achievable goals - Increase employee acceptance of goals - Provide incentives to achieve goals - Give feedback on goal attainment

38. Copyright© 2007 South-Western/Thomson Learning All rights reserved Applying Goal-Setting Theory in Multinational Settings Goal setting works to some degree, regardless of location. Cultural expectations vary—managers must know - Is it better to set goals for groups or for individuals? Goal setting works to some degree, regardless of location. Cultural expectations vary—managers must know - Is it better to set goals for groups or for individuals?

39. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.12: Cultural Effects on Performance by the Degree of Participation in Goal Setting

40. Copyright© 2007 South-Western/Thomson Learning All rights reserved Reinforcement Theory Operant conditioning: model proposes that behavior is a function of its consequences Positive reinforcement—response with rewarding consequence - Pleasurable consequence = behavior continues Punishment—negative consequence - Unpleasant consequence = behavior stops Operant conditioning: model proposes that behavior is a function of its consequences Positive reinforcement—response with rewarding consequence - Pleasurable consequence = behavior continues Punishment—negative consequence - Unpleasant consequence = behavior stops

41. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.13: Management Examples of Operant-Conditioning Process and Types of Consequences

42. Copyright© 2007 South-Western/Thomson Learning All rights reserved Applying Reinforcement Theory in Multinational Settings Positive reinforcement works Difficulty is in identifying appropriate rewards as reinforcers National context defines acceptable and legitimate rewards Positive reinforcement works Difficulty is in identifying appropriate rewards as reinforcers National context defines acceptable and legitimate rewards

43. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.14: Effects of Positive Reinforcement and Types of Rewards in a Russian Cotton Mill

44. Copyright© 2007 South-Western/Thomson Learning All rights reserved Multinational Applications of Process/Reinforcement Theories Expectancy theory: key is identifying nationally appropriate rewards that have positive valence Equity theory: assess meaning and principle of equity in national context Goal-setting theory: should goals be assigned to groups or individuals? Reinforcement theory: what people value at work will influence the types of reinforcers that can be used Expectancy theory: key is identifying nationally appropriate rewards that have positive valence Equity theory: assess meaning and principle of equity in national context Goal-setting theory: should goals be assigned to groups or individuals? Reinforcement theory: what people value at work will influence the types of reinforcers that can be used

45. Copyright© 2007 South-Western/Thomson Learning All rights reserved Motivation and Job Design: U.S. Perspectives The job-characteristic model approach - Work is more motivating when managers enrich core job characteristics, such as by increasing number of skills a job requires. The job-characteristic model approach - Work is more motivating when managers enrich core job characteristics, such as by increasing number of skills a job requires.

46. Copyright© 2007 South-Western/Thomson Learning All rights reserved Job-Characteristics Model Three critical psychological states as motivating - A person must believe that his or her job is meaningful. - A person must believe that he or she is responsible or accountable for the outcome of work. - A person must understand how well he or she has performed. Three critical psychological states as motivating - A person must believe that his or her job is meaningful. - A person must believe that he or she is responsible or accountable for the outcome of work. - A person must understand how well he or she has performed.

47. Copyright© 2007 South-Western/Thomson Learning All rights reserved Core Characteristics of Job Skill variety Task identity Task significance Autonomy Feedback Skill variety Task identity Task significance Autonomy Feedback

48. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.15: A Motivating Job in the Job-Characteristics Model

49. Copyright© 2007 South-Western/Thomson Learning All rights reserved Motivation and Job Design: European Perspective Sociotechnical systems (STS) approach: focuses on designing motivating jobs by blending the social system with different technologies Autonomous work group: team or unit that has nearly complete responsibility for a particular task Team’s task rather than individual task is focus of job enrichment Sociotechnical systems (STS) approach: focuses on designing motivating jobs by blending the social system with different technologies Autonomous work group: team or unit that has nearly complete responsibility for a particular task Team’s task rather than individual task is focus of job enrichment

50. Copyright© 2007 South-Western/Thomson Learning All rights reserved Choosing Job-Enrichment Techniques in Multinational Settings Distinction between individualistic and collectivist cultures should determine the choice of job-enrichment - U.S.—individual - Japan—team Social loafing: term used when people expend less effort when they work in groups Distinction between individualistic and collectivist cultures should determine the choice of job-enrichment - U.S.—individual - Japan—team Social loafing: term used when people expend less effort when they work in groups

51. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 14.16: Comparing the Performance of Chinese, U.S., and Israeli Managers Working Alone and in Groups

52. Copyright© 2007 South-Western/Thomson Learning All rights reserved Conclusion Motivating workers in diverse cultural settings is a constant challenge for multinational managers Chapter addresses several important issues related to motivation Chapter first examines basic differences in how people view various work aspects Chapter reviews basic processes and classic theories of motivation Each multinational must find ways to motivate their workers to stay competitive Motivating workers in diverse cultural settings is a constant challenge for multinational managers Chapter addresses several important issues related to motivation Chapter first examines basic differences in how people view various work aspects Chapter reviews basic processes and classic theories of motivation Each multinational must find ways to motivate their workers to stay competitive