Transcript Chap07.ppt

Part Two: Understanding Cross-cultural
Management
CULTURE AND
THE ORGANIZATION
Slide 7.1
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Part Two: Understanding Cross-cultural
Management
CHAPTER 7
CULTURE AND
CORPORATE STRUCTURES
• Concept 7.1: Organizational structures
Slide 7.2
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Organizational structures
Organizational structure forms the basis of the
organization’s culture:
– formalizes the tasks, jobs and positions of its
personnel, as well as the limits and
responsibilities of the work units
– indicates the kind of hierarchy within the
organization, the levels of authority and power
as well as the formal lines of communication
between the employees
Slide 7.3
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Forms of organizational structure
Fatehi (1996) puts forward a detailed classification
of five organizational structures:
• Geographic structure
• Functional structure
• Product structure
• Mixed structure (combinations of above)
• Matrix structure (the two ‘lines’ –functional and
project – share responsibility)
Slide 7.4
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Recent forms of organizational structure
With globalization, new organizational forms or
adaptations to keep pace with economic reality
• Network structure
– a network of company units which has a horizontal
system of communication
– facilitates cross-cultural transfer of knowledge and
organizational learning
– Think of the
conglomerates/multinationals/companies having this
type structure.
– Coffee Beans? Visit website..
Slide 7.5
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Recent forms of organizational structure
• Transnational structure (Bartlett and
Ghoshal, 1989)
– a multi-faceted organization which can respond to
international, multinational and global environment
– dispersed, interdependent, and specialized
– its national units make differentiated contributions to
integrated worldwide operations
– its knowledge is developed jointly and shared
worldwide.
– Examples of transnational companies? GM & Ford
(read article-classweb)
Slide 7.6
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Impact of cultural diversity
STRUCTURE
Multidomestic: autonomous subunits situated in several
countries..
International: The culture of the
organization considered universal
CULTURAL DIVERSITY
no impact on the organization
Multinational: diversity is
inherent through geographical
spread
can cause problems but can
also benefit organization
regarded as a source of
conflict: it leads to inefficiency
Transnational: generates its own allows mutually beneficial
evolution: heterogeneity
relations to be created
indispensable.
Slide 7.7
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Understanding Cross-cultural Management
CHAPTER 7
CULTURE AND
CORPORATE STRUCTURES
• Concept 7.2: Corporate cultures
Slide 7.8
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Corporate culture and management
• For strategy, culture
– is a diagnostic element
– acts as a framework of reference for instigating
strategy
– a framework of reference in human resource
management for change policies and the
involvement of the people in the process
• If management is defined as an activity based on
three aspects: action, the management of people
and the achievement of objectives, to what extent
does culture have an impact on management?
Slide 7.9
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Corporate culture and management
(Continued)
Culture is of interest to management:
• offers the possibility of increasing efficiency at
various levels, finding behaviours which allow the
best performance possible
• allows the manager to explain how the
organization works before deciding whether it
needs to be changed
• helps to understand the organization as an entity,
as a collection of individuals - can serve as a
framework of reference for situations in the future
Slide 7.10
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Corporate culture and management
(Continued)
Levels of corporate culture
• Schein (1999) general definition of culture with its
three separate layers
Artefacts
Espoused
values
Shared tacit
assumptions
Slide 7.11
everything which is visible
within an organization
the strategies, objectives and
philosophies of organization
the thought and perception
driving the overt behaviour
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Corporate culture and management
(Continued)
• Through a joint learning process, these beliefs
and values become tacit assumptions about the
nature of the world and how to succeed in it
• For Schein, cultural assumptions
– are to do with internal workings of an organization, AND
– how it sees itself in relation to its environment
• The culture content of the organization must:
– survive in the external environment (mission, strategy, structure,
processes)
– integrate human aspects (common language, relationships)
– take account of the national culture in which it is operating
Slide 7.12
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Corporate culture and management
(Continued)
Corporate values: ‘the basic concepts & beliefs of
an organization’ (Deal & Kennedy)
• form the very basis of corporate culture:
• give direction and guidelines for day-to-day
behaviour
• lack of concern for these values can undermine
leadership and commitment
• values are an indispensable guide for making day-today choices
Slide 7.13
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Corporate culture and management
Three characteristics emphasize values and
distinguish companies from each other:
• Organizations have an explicit philosophy as to why
they are conducting business.
• Management is intent on communicating the values
which shape the company in terms of the economic
choices and its business environment.
• These values are shared at all levels of the
organization, from the shop floor to the board room.
Slide 7.14
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Identifying corporate cultures
Deal & Kennedy (2000) present a classification of
types of corporate culture using two factors:
• How much risk is involved in the firm’s activities?
• How much time is needed before a company and
its employees know how successful their decisions
or strategies have been (feedback)?
Slide 7.15
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Identifying corporate cultures
The Tough Guy,
Macho Culture
e.g. police, hospitals,
cosmetics
Work Hard / Play Hard
Culture
e.g. company sales
department
Bet Your Company
Culture
e.g. exploration
companies (oil)
The Process Culture
e.g. banks, insurance,
pharmaceutical
Slide 7.16
 lots of risk-taking, quick feedback
 emphasis on youth and speed.
 quick decisions needed, even if not
always right
 ‘Fun’ and action with quick feedback
 low-risk activities (strict control system
preventing major risks)
 consumers very important
 high risk, slow feedback
 years before pay-off or failure.
 much discussion to ensure the right
decision is taken
 low-risk activities with little feedback
 focus on how things are done rather
than what needs to be achieved
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Stereotyping corporate culture
Model (Trompenaars & Woolliams, 2003) based on
‘organizational relationships’
The Incubator
The Guided
Missile
The Family
The Eiffel
Tower
Slide 7.17
 focused on self-realization, commitment to
oneself and professional recognition
 low degree of centralization and a high degree
of formalization
 task-oriented, focus on power of
knowledge/expertise
 commitment to tasks, pay for performance
 high centralization and low formalization
 power-oriented, with stress on personal
relationships and entrepreneurial character
 high formalization, high centralization
 role-oriented, with power attached to the
position or role
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009
Conclusion
• The culture of each company remains
essentially different
• Culture is a way a company can differentiate
itself from its global competitors
• If the company has adapted to the demands of
its environment, culture remains the most
effective way of maintaining a lasting
competitive advantage
Slide 7.18
Browaeys and Price, Understanding Cross-cultural Management, 1st Edition, © Pearson Education Limited 2009