Globalization = A process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration/unity worldwide; others do not. The increase in interconnections is the result of shifts that have taken place in technological, political, and economic spheres.
Four categories of change that illustrate the process of globalization:
Growing economic interconnectedness
More complex and dynamic work environment; Causes of globalization that affect the stability of the work environment within organizations are
Increased use and sophistication of information technology;
More and different players on the global stage
The elements of the global manager’s environment can be divided into four categories: economic, legal, political, and cultural.
Management = Managers have formal authority over their organizational unit and this status divides their activities into interpersonal, informational, and decisional role categories. Mintzberg’s framework identifies ten role categories of managers.
Types of international management research (for a summarizing table for all types of management research, their cultural assumptions and key research questions, refer to Table 1.3 on page 14.):
Domestic research = Studies that are designed and conducted within a single country without regard for the boundary conditions set by the cultural orientation of the country. Constraint in both its ability to advance theory and its practical application.
Replication research = Studies that are conceived and managed by a researcher in one country and then repeated in other countries by the originator or by local collaborators. They assume that the responses in the two cultures can be compared directly.
Indigenous research = Studies that focus on the varied ways in which managers behave and organizations are run in a variety of specific cultural settings. They assume cultural differences and the research is conducted within a single country.
Comparative research = Studies that seek to find both the similarities and the differences that exist across cultures regarding a particular management issue. Important is that researchers do not present one cultural perspective as dominant.
International research = Studies that focus attention on multinational enterprises. They do recognize both similarities and differences across cultures. However, cultural context is not very present.
Intercultural research = Studies that seek to understand the interactions between culturally different individuals in organizational settings. It considers the culture of all parties in the interaction and contextual explanations for observed similarities and differences.
Methodological issues in cross-cultural research:
Equivalence = The opportunity for bias caused by cultural differences in values, attitudes, and normative behavior is staggering. Equivalence means that culturally different participants understand equally the concept and its relationship to other concepts in the study.
Sampling = Its goal is to conduct research with a small number of participants who accurately represent the population about which we want to make conclusions. The ability to select a truly representative sample in cross-cultural research is difficult. conditions of theoretical sampling, and convenience samples are used.
Data collection = The most common methods are 1) questionnaires and 2) interviews.
Culture = Consists of patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievement of human groups, including their embodiment in artifacts;
Features of culture:
Culture is shared
Culture is learned
Culture is systematic and organized
‘Reasons why cultures differ’
This section examines environmental elements that cause cultural differences.
Survival
Language
Religion
Other factors; factors that contribute to cultural variation and persistence are:
Climate, topography, and the indigenous economy
Proximity and topography: affect exchange of culture through natural barriers.
Economic systems and technology
Political boundaries
Debates around culture: due to ambiguity, several issues raised concerning culture. These issues are the concept of:
National culture
Convergence, divergence, or equilibrium; The extent to which cultures around the world are becoming more similar
Organizational versus national culture; Organizational culture = 1) stable attitudes, beliefs, and values held in common by organization members, 2) shared normative beliefs and behavioral expectations, 3) a set of goal-directed values, beliefs, and behaviors, 4) an internal attribute of the organization that is socially constructed, historically determined, holistic, and difficult to change.
Acculturation and biculturalism;
One way in which cultures change is through the process of acculturation. Acculturation concerns the psychological and behavioral changes that occur in people because of contact with people from different cultures. Furthermore, it is used to describe the changes in people who relocate from one culture to another.
People that are used to live in multiple cultures develop the ability to easily adjust their behavior to the cultural context. These people are called ‘bicultural’.
When individuals are categorized as a group, individuals are thought to be more similar in their beliefs and behavior, their behavior is thought to convey less information about them as individuals, and the group is believed to be a more important cause of their behavior than individual characteristics. However, the categorization has several implications:
In-group bias
Ethnocentrism
Kluckhohn and Strodtbeck identified six dimensions along which a society can be categorized, see Figure 3.1 on page 44:
Relationships to nature; Control nature (domination) – work together (harmony) – submit to nature (subjugation)
Orientation to time; People should make decisions with respect to traditions or events in the past – present – future
Beliefs about human nature; Good – mixed – evil
Nature of human activity; Orientation on living for the moment (being) – reflecting (controlling) – striving for goals (doing)
Relationships between people; Greatest concern and responsibility for one’s self + family (individualistic) – for one’s own group (group, collateral) – for one’s groups that are arranged in a rigid hierarchy (hierarchical).
Conception of space; Private – mixed – public
The value orientations are not bipolar dimensions.
Culture comparison - Hofstede’s Framework: Hofstede developed a framework with respect to comparing cultures. He identified four dimensions:
Individualism – collectivism
Power distance
Uncertainty avoidance
Masculinity – femininity
Actually, there is also a fifth and a sixth dimension:
Confucian Work Dynamism (also: Long-term Orientation)
Indulgence – restraint
Intranational consensus = Level of agreement between individuals in a society about the importance of a particular value dimension.
In an effort to investigate the possibility that Hofstede’s study might contain cultural bias because it was developed in the West, researchers conducted a similar study based on Chinese values. This study indicated four dimensions:
Integration: incl. tolerance, harmony, solidarity, etc.
Human-heartedness: incl. kindness, patience, etc.
Confucian work dynamism: incl. order, persistence, sense of shame, etc.
Moral discipline: being disinterested, having few desires, etc.
Hofstede also provided a measure of national cultural distance, using his four cultural dimensions.
Iij = index for the ith cultural dimension for the jth country.
Iiu = index for the ith cultural dimension for the uth country.
Vi = variance for the ith cultural dimension.
The Schwartz Value Survey (SVS); this study identified three universal human requirements:
The nature of the relationship between the individual and the group.
The preservation of the society itself.
Final problem related to the relationship of people to the natural world.
Value types = groups in which values are clustered.
To define cultural dimensions at the level of national culture, Schwartz and colleagues, performed a multidimensional scaling analysis on the correlations between the average rating and the universal values in a number of different samples in countries. This yielded seven value types:
Egalitarianism; Recognition of people as moral equals.
Harmony; Fitting in with the environment.
Embeddedness; People as embedded in the collective.
Hierarchy; Legitimation of unequal distribution of power.
Mastery; Exploitation of the natural or social environment.
Affective autonomy; Pursuit of positive experiences.
Intellectual autonomy; Independent pursuit of own ideas.
Fons Trompenaars also conducted a study related on value orientations.
Universalism – particularism
Individualism – collectivism
Neutral – affective
Specific – diffuse
Achievement – ascription
Time
Environment
Two more dimensions of cultural variation at the national level were discovered later and can be seen as extensions and refinements of Hofstede’s individualism – collectivism and power distance dimensions:
Loyal involvement – utilitarian involvement
Conservatism – egalitarian commitment
The GLOBE study = Global Leadership and Organizational Behavior Effectiveness, is the most recent study of cultural differences.
One of the outcomes of the GLOBE research was the construction of nine dimensions of cultural variation. The first four are direct extensions of Hofstede’s work:
Institutional collectivism
In-group collectivism
Power distance
Uncertainty avoidance
The 5th and 6th are a reconceptualization of Hofstede’s masculinity-femininity dimension:
Gender egalitarianism
Assertiveness
The 7th and 8th are based on the work of Kluckhohn and Strodtbeck:
Humane orientation
Future orientation
The final dimension is defined by the GLOBE authors:
Performance orientation
Individualism and collectivism are perhaps the most useful and powerful dimensions of cultural variation in explaining a diverse array of social behavior.
Although individualists and collectivists probably behave similarly toward members of their in-group, they differ in the ways in which they designate who is a member of this group.
Tightness = the extent to which members of a culture agree about what is correct behavior, believe they must behave exactly according to cultural norms, and believe they will receive or should give severe criticism for even small deviations from cultural norms.
Note: a culture might be tight and loose at the same time. For example, being tight in political a context and loose in terms of religion.
Note: Hofstede found a high positive correlation between gross national product and individualism, with wealthier countries being more individualistic.
For an illustration of the relationship between tightness, cultural complexity, and individualism – collectivism, refer to Figure 3.4 on page 57.
Social axiom = basic truths or premises, or generalized expectancies that relate to a wide range of social behaviours across different contexts.
Social axioms are not statements, like “Good health is important”, but are more of causal relationships, “Good health leads to success”.
Culture as a source of guidance; 8 sources of guidance for handling the work situations managers face;
Organization rules and procedures
Superiors
Colleagues
Subordinates
Staff experts (internal consultants)
Organization’s norms
Society’s norms
Own experience and training
Refer to Table 3.3 on page 61, negative numbers mean that it is the least important (widespread beliefs in this case).
Social cognition = The role that our mental representations play in the ways we process information about people or social events.
Cultural identity = In international management, we are most concerned with the effect of the categorization of people, particularly regarding their culture. We categorize ourselves according to our membership within or outside the social groups in our environment. This categorization includes information about the relevant attitudes and behaviors associated with these groups.
Cultural norms = Acceptable standards of behavior that are shared by members of our cultural group. Social groups enforce norms only if they perform one of the following functions:
Facilitate the group’s survival
Increase the predictability of group members’ behavior
Reduce embarrassment for group members
Express the central values of the group (clarify the group’s identity)
Perception = the process by which people interpret the messages received from their senses and thereby give meaning to their environment.
An important effect of categorization of others as out-group members is that once categorized, they are subsequently perceived as being more similar to each other than in-group members, perceived similarity and attraction. That is because we see the individual variation that occurs in our own cultural group but perceive other cultures as homogeneous.
Selective avoidance = When confronted with information contrary to our existing views, we tune it out by diverting our attention elsewhere.
Stereotypes = a categorization of the characteristics and behavior of a set of individuals. Thus, stereotypic expectations of a cultural group are a result of the natural cognitive process of social categorization.
The usefulness of stereotypic expectations about members of another culture is limited due to:
The extent to which these mental pictures contain accurate information.
Our recognition that either positive or negative feelings about the cultural group are invariably attached to the stereotype.
Our ability to adjust our expectations based on new information about the group.
Social dominance theory = suggests that within every complex society certain groups are dominant over others and enjoy a disproportionate amount of privilege.
Attributions = help us understand and react to our environment by linking the observation of an event to its causes. The search for and assignment of a cause for behavior seems to be a mental process that operates in much the same way across cultures.
For the Cross-cultural interaction model, refer to Figure 4.2 on page 81. >> Assumption: behavior of a person from another culture.
Motivational implications of differing self-concepts:
People with independent self-concepts will be motivated to express internal needs, rights, and the capacity to withstand undue social pressure.
People with interdependent self-concepts will be motivated to be receptive to others, to adjust to their needs, and to restrain their inner needs or desires.
People with interdependent self-concepts are more influenced in their behavior by contextual factors (ex. norms).
Motives linked to the self (ex. self-enhancement) can assume a different form, depending on the concept of self being enhanced or verified.
The study of managerial decision making is typically divided into:
Prescriptive approaches = What managers should do, the model is based on a set of assumptions that indicates how a decision should be made.
Descriptive approaches = What managers actually do.
In order to optimize a particular outcome, people must progress either implicitly or explicitly through six steps in the decision-making process, refer to Box 5.1 on page 89:
Problem definition
Identify decision criteria
Weight the criteria
Generate the alternatives
Evaluate the alternatives
Select the optimal solution
The cultural variation in decision criteria is consistent with the cultural orientations of the managers. Differences exist in:
The amount of information one considers before making a final decision is culture bound.
Cultures with a strong past orientation tend to place more value on alternative solutions that have been used successfully in the past, whereas present- or future-oriented cultures are more likely to favor unique and creative solutions to problems.
The extent to which people vary in the choice rules they use in making decisions. Individualistic cultures are more likely to use a variety of different choice rules than collectivistic cultures.
Motivational differences may influence the weighting of alternatives.
The person who makes the decision and how long the decision process takes (vertical/horizontal cultures).
The optimization model assumes that decision makers can:
Accurately define the problem
Identify all decision criteria
Accurately weigh the criteria according to known preferences
Be aware of all available alternatives
Accurately assess each alternative
Although decision makers might attempt to follow a rational model consistent with their cultural norms, they are limited in their ability to do so. Individual judgment is restricted by its ability to be rational and by cognitive limitations.
Decision makers use one of four decision styles to cope with the psychological stress of making a decision:
Vigilance
Complacency
Defensive avoidance
Hypervigilance
There is found significantly greater use of the alternatives to vigilance in non-Western than in Western.
Heuristics = rules of thumb (cognitive tools) that people use to simplify decision making. It can result in biases in the decision, but often the increased speed of decision making outweighs the loss in decision quality. People are unaware of using heuristics. The three general heuristics that are used to simplify decision making are:
Availability
Representativeness
Anchoring and adjustment
These heuristics presented can result in specific types of biases. When we consider cultural variation and the role it plays in social cognition, we can anticipate systematic differences in how these heuristics are applied and the resulting biases.
Two common managerial decisions that are relevant in terms of cross-cultural interactions are (1) the selection of employees, and (2) the allocation of rewards.
Increasingly, managers around the world are recognizing the ethical dimension of their decisions. The consensus about what is morally correct erodes in the face of differing values and norms.
Moral philosophy = a set of principles used to decide what is right or wrong. The main categories are:
Consequential models = focus on the outcomes or consequences of a decision to determine whether the decision is ethical.
Utilitarianism = the moral doctrine that we should always act to produce the greatest possible balance of good over harm for everyone affected by our decision.
Deontological or rule-based models = human beings have certain fundamental rights and that a sense of duty to uphold these rights is the basis of ethical decision making. The best known approach is the categorical imperative (KANT).
Cultural relativism = moral concepts are legitimate only to the extent that they reflect the habits and attitudes of a given culture.
Cognitive moral development = approach to understanding ethical decision making that focuses on the mental determination of right and wrong based on values and social judgments.
Organizations differ in adopted principles of social responsibility and have processes for social responsiveness. These principles and processes facilitate ethical decision making.
Thus, the limited amount of research on descriptive models of ethical behavior illuminates the importance of the three factors:
Level of moral development
Individual factors
Situational factors in describing ethical decision making in an international environment.
Underlying every negotiation that takes place in an international context is the process of cross-cultural communication.
Communication = transmitting messages, including information about the nature of the relationship, to another person who interprets these messages and gives them meaning.
For the understanding of the message, the sender and receiver must share a vast amount of common information, called grounding.
Cultural field = culturally based elements of a person’s background that influence communication.
Figure 6.1 on page 113 shows how cross-cultural communication works. Effectiveness of the communication depends on the lack of distortion. Distortion can occur through several reasons:
The encoded message can be affected by the communication skills and knowledge of the sender and by the associated cultural field. The ability to encode accurately is determined by our skill in the chosen channel.
The symbols a person uses to express an idea vary with the cultural field. Convenience and skill are important determinants in the choice of medium.
All of the factors that affect the sender also influence the receiver. Therefore, the receiver must also be skilled in the medium in use and have sufficient knowledge to interpret the message correctly.
The extent to which the cultural fields overlap reduces the opportunity for distortion.
Language = a symbolic code of communication consisting of a set of sounds with understood meanings and a set of rules for constructing messages.
Communication behaviors are logical extensions of the internalized values and norms of their respective cultures. Thus, culturally based rules govern the style, conventions, and practices of language usage.
Cultures differ in terms of communication:
Explicit versus implicit communication;
Direct versus indirect communication;
There also exist cultural differences in the use of silence. Often collectivist cultures value silence as a way of controlling the communication interaction, whereas individualists value talking in the same way. However, even among individualist cultures, the use of silence and talking can vary.
One additional stylistic element that has a systematic relationship to culture is the use of praise and the response to praise. Cultural differences exist in how frequently praise is used, what is praised, and how people respond.
Slang and jargon: Slang is an informal usage of language typically more playful or metaphorical and associated with a particular subgroup. Jargon is associated with a particular subgroup but is often a very specialized or technical language of people engaged in a similar occupation or activity.
Euphemisms = every culture has words that by tradition or convention are not often used publicly. These prohibited words are often associated with sexual relations or bodily functions
Idioms = every language has unique ways of combining words to express a particular thought. Often, a particular phrase or construction differs from its literal meaning.
Proverbs and maxims = Short sayings that express things that are obviously true in a particular culture and often advise people how they should behave.
Language accommodation = Who will accommodate whom in an intercultural communication? Speech accommodation involves shifting one’s speech patterns to achieve greater language similarity. Sometimes, because of a history, one language group refuses to speak another group’s language.
Stylistic accommodation = The idea that adapting one’s communication style to that of the other culture participant in an intercultural communication will help to bridge cultural distance and improve communication is based on the similarity-attraction paradigm.
Language fluency = The degree of language fluency creates several problems for the second-language user that extend beyond the user’s ability.
Nonverbal communications convey important messages and are produced more automatically than words.
However, nonverbal systems of communication have a significant amount of variation around the world. The two types of differences are:
The same nonverbal behavior can have very different meanings across cultures.
Different nonverbal cues can be used to mean the same thing in different cultures.
Categories of nonverbal behaviors are:
Tone of voice = along with the words we speak, the way we say them communicates feelings and attitudes. It includes pitch, volume, speed, tension, variation, etc.
Proxemics = the way in which people use personal space in their interactions with others. People seem to follow predictable patterns when establishing distance between themselves and others that are consistent with cultural norms
Body position and gestures = the way people position their body conveys information in all cultures
Facial expression = a key source of information, particularly about emotional states. Underlying emotional states seem to be closely linked to facial expression.
Eye contact (gaze): All cultures use gaze in nonverbal communication. Both maintaining eye contact and avoiding eye contact communicate important messages.
An important application of cross-cultural communication for the international manager is face-to-face negotiation. All negotiations share some universal characteristics. They involve two or more parties who have conflicting interests but a common need to reach an agreement. Research found that the outcomes of negotiation are to be contingent on:
Factors associated with the behavior of people involved in the negotiation.
Factors associated with the process of negotiation.
Factors associated with the negotiation situation.
Efforts to understand cross-cultural negotiations fall into one of three types:
Descriptive approaches = The Graham four-stage model suggests that all business negotiations proceed through four stages:
Non-task sounding or relationship building
Task-related exchange of information
Persuasion
Making concessions and reaching agreement
Cultural dimensions approach = The cultural effects are attributed to the cultural values and norms of the participants. Cultural dimensions have been related to differences in cognitive processes related to negotiation. Individualist and collectivist cultures have been found to differ with regard to egocentric perceptions of fairness. Cultural dimensions also relate to the negotiation processes and their outcomes.
Holistic approach = Considers both the knowledge structures of the participants and the social context in which the negotiation takes place. The extent to which negotiators believe they are accountable for the negation outcomes influences their behavior.
An example of metaphors is shown in Table 6.2 on page 136. metaphors may be a useful tool in that hey help negotiators understand their own culture and who it shapes the reality they impose on the negotiation situation.
One of the most difficult tasks that international managers face is the need to motivate and lead individuals from different cultures.
Motivation = willingness of individuals to exert effort toward a goal. The concept is studied in two types of theories:
Content theories: explain motivation in terms of need satisfaction. Unsatisfied needs create tension, which individuals are motivated to reduce through their behavior.
Process theories: explain the choices that people make about their behavior. There are three main process theories:
Equity theory (Adams) = Motivational consequences result from the imbalance that can exist when individuals perceive that the ratio of their inputs to outcomes is unequal. As a result, individuals will behave in a way to restore balance.
Expectancy theory (Porter & Lawler, Vroom) = Motivation is the result of the combination of the expectation that effort (E) will lead to performance, that his performance will be instrumental (I) in reaching certain outcomes, and the value (V) placed on these outcomes by individuals. Thus, effort = V * I * E.
Goal-setting theory (Locke & Latham) = Involves the responses of individuals to the existence of goals and the manner in which the goals were set. The basic principles of goal setting are (1) specific difficult goals (but achievable) consistently lead to better performance than specific easy goals, general goals, or no goals; and (2) goal setting is most effective when there is feedback showing progress toward the goal.
Individual work motivation is influenced by why people engage in work and what they value in their work.
In the past the focus of work design was on improving worker efficiency, now more focus is going to the characteristics of the job to increase worker motivation. Three approaches to job design from three different cultures are:
The job characteristics model
Socio-technical systems
Quality control circles
Job characteristics model suggest that any job can be defined in terms of five characteristics:
Skill variety: different activities required
Task identity
Task significance: substantial effect on others
Autonomy
Feedback
To be motivating, a job must be perceived as (1) meaningful, the worker must (2) feel responsible for outcomes, and the worker must (3) know the actual results of work activities.
Another example of job design is the quality circles based on the belief that workers understand their own work better than anyone else and therefore contribute to its improvement.
Quality circles = small groups that voluntarily and continuously conduct quality control activities.
Western definition of leadership = the ability of individuals to influence organization members toward the accomplishment of goals.
WESTERN LEADERSHIP THEORY
Leadership theory is often described as having progressed through four distinct periods, each with a dominant theoretical approach:
Trait theories
Initiating structure = Production or task oriented.
Consideration = Employee or relationship oriented.
Fiedler’s contingency model presents the basic idea that the situation moderates the relationship between the leader’s style and effectiveness..
Path-goal theory identifies four leader behaviors and specifies a number of situational and follower characteristic moderators of the relationship between leader style and follower satisfaction and performance
Implicit theories
These theories define leadership as the process of being perceived as a leader. Followers develop mental representations or prototypes of leaders through exposure to social situations and interactions with others.
Charismatic or transformational leaders = those who are able to inspire their followers to transcend their own self-interests for the good of the organization.
The Global Leadership and Organizational Behavior Effectiveness (GLOBE) research program is a recent extension of implicit leadership theory. Six dimensions of leadership were derived:
Charismatic/value based
Team oriented.
Participative
Humane oriented
Autonomous
Self-protective
NON-WESTERN THEORIES OF LEADERSHIP
There exist three non-Western theories of leadership:
Performance-maintenance theory (PM)
Leadership in the Arab world
Paternalism
The cross-cultural model of leadership, see Figure 7.2 on page 156, has as its basis a cognitive information processing approach to leadership.
The general functions of leadership are probably universal across cultures. Leadership in a number of cultures is categorized as concerned with the task, with the relationship with members, or both.
Culture seems to affect the type of leader behavior accepted and effective in a given society. In general, leadership styles across cultures are consistent with the dominant cultural values of the country. The cross-cultural model of leadership suggests that leader behavior consistent with what followers expect will be more likely to result in an individual being perceived as a leader and therefore make that individual more effective.
Three distinctive characteristics of work groups in organizations have been identified.
Work groups are social systems that have boundaries with members who have different roles and are dependent on each other. Both people within the group and those on the outside will recognize the group’s existence.
The groups have a task to perform.
Work groups function in an organizational context.
Distinction between three primary types of work groups:
Task forces
Crews
Organizational teams
One must consider these differences in trying to explain and predict the behavior of different organizational groups.
The effectiveness of a work group depends on how well the group uses its resources to accomplish its task.
Figure 8.1 on page 164 shows the work of Goodman and identifies six variables that influence the process and performance of the group:
The external or contextual conditions imposed on the group
The resources of the group members
The structure of the group
The group process
The group task
The composition of the group
Groupthink = the norm for group consensus overrides the motivation to realistically appraise alternative courses of action.
Social loafing = individuals reduce their effort on group tasks.
An additional element of group processes is the changes that groups go through over time. Tuckman argues that all groups go through five stages:
Forming = Group members begin to think of themselves as part of a group. They might be uncertain how they fit into the group.
Storming = The characteristics, attitudes, and expectations of individuals come into conflict with the structure of the group.
Norming = The group agrees on the expectations that specify the acceptable behavior of the group.
Performing = The efforts of the group shift to accomplishing the task at hand.
Adjourning = The task is completed.
Note: groups can revert to prior stages.
The nature of the tasks in which the group is engaged influences both the processes and outcomes of the group. Jackson classifies group tasks into three types:
Clearly defined production tasks.
Cognitive or intellective tasks: problem-solving tasks.
Creative idea generation and decision-making tasks: reaching consensus.
Group composition; findings:
Heterogeneity in observable attributes is generally found to have a negative effect on affective outcomes.
Group heterogeneity on underlying attributes has a direct relationship to the level of process losses suffered by the group.
Group heterogeneity on task-related abilities and skills is typically shown to be positively related to group performance on the tasks typically found in organizations.
Culture’s influence on work groups is mainly present in the cultural composition of the work group. The cultural composition of work groups affects the way they function through three general types of mechanisms:
Cultural norms = The orientations of the specific cultures represented in the group toward the functioning of groups.
Cultural diversity = The number of different cultures represented in the group.
Relative cultural distance = The extent to which group members are culturally different from each other.
Cultural diversity is about the number of different cultures that are represented in the group. When group members fall into two non-overlapping cultural categories, individuals sometimes identify more strongly with their cultural subgroup than with the task group as a whole. These cultural subgroups are called faultlines.
A hybrid team culture emerges in response to change of direction and facilitate the performance of culturally diverse work groups.
Relative cultural distance concerns the extent to which each individual in the group is culturally different from the other group members. Culturally different work groups are aware that they are different, and this awareness causes them to compare themselves to the other members of the group.
Virtual teams: many organizations are dealing with the challenges of globalization by forming work groups with geographically dispersed structures.
The dominant characteristics of the organization influence the types of goals and methods that are acceptable for work groups. Key organizational factors that influence the effectiveness of work groups are:
Level of management support.
The extent to which individual rewards come from the group.
The status afforded the group.
The amount of training provided to the group.
The extent to which the organization allows groups to be self-managed.
Research suggests that a mix of individuals and group rewards will be most effective with work groups, particularly the self-regulating variety.
Research suggests that being a member of a high-status group will increase members’ feelings of self-worth and effectiveness.
Managers often seem to assume that employees automatically have the skills to be effective work group members. The need for training in the specific electronic tools required for interaction in global virtual teams is obvious.
Organizations are social systems intentionally structured to achieve goals.
The complexity of an organization is the extent to which it is differentiated along three dimensions:
Horizontal differentiation
Vertical differentiation
Spatial differentiation
Formalization is the extent to which rules and procedures determine the activities of organization members. Highly formal organizations make a lot of use of rules and procedures.
Centralization is the extent to which decision making is concentrated at a single point.
These three elements of organization structure can be combined in various ways. However, every organization’s structure is characteristic of one of two fundamental types, figure 9.1:
Mechanistic organizations: centralized decision authority, high formality, and high complexity.
Organic organizations: decentralized decision authority, low formalization, and low complexity.
Mintzberg proposed that all organizations are composed of five essential parts:
The operating core
The middle line
The support staff
The technostructure
The strategic apex
According to Mintzberg, each of these parts is dominant in one of the five basic types of organizational design, see Table 9.1 on page 185 for characteristics and examples:
Simple = The strategic apex is dominant.
Machine bureaucracy = Technostructure is dominant.
Professional bureaucracy = Operating core is dominant.
Divisional = Middle-line is dominant. Groups of semi-autonomous units coordinated by a central headquarters.
Adhocracy = Support staff is dominant.
Explanations that have evolved for the existence of different organizational structures can be classified into four groups. In the order of their development:
Deterministic theories
Contingency theories
Ecological theories
Institutional theories
Alternatives to the culture-free perspective often rely on the effect of societal institutions as a basis for understanding national differences in organizational structures.
Informal organization refers to the elements of an organization that help to reduce individual variability in the behavior of organization members but is not reflected in a formal organization chart.
Organizational culture produces both functional behaviors that contribute to the goals of the organization and dysfunctional behaviors that have negative effects.
Van den Berg and Wilderom suggest that organizational culture can be defined along five dimensions:
Autonomy
External orientation
Interdepartmental coordination
Human resource orientation
Improvement orientation
Five ways of integrating international activity are common:
International division: groups all international activities together in a single organizational unit.
Product division: groups all units involved with like products together around the world. In this case, it is possible for foreign subsidiaries in the same country to have a different relationship to the firm depending on the product line.
Functional division: expands its domestic functional units into its foreign counterparts based on geography.
Geographic division: groups all functional areas into geographic units.
Matrix structure: each subsidiary reports to more than one group for the purpose of integrating international operations with functional areas, product areas, or both.
A recently emerged international organizational form is that of collaborative alliances with foreign firms. These alliances typically take one of three forms:
Informal cooperative alliances: often limited in scope and has no contractual requirement.
Formal cooperative alliances: require a contractual agreement and are often indicated by broader involvement.
International joint ventures: separate legal entities with joint ownership.
Another way in which new organizational forms are created is through the merger of firms or the acquisition of one firm by another.
Research suggests that pressures for consistency among subsidiaries in the international firm stem from two factors:
Organizational replication = the tendency of the firm to duplicate, in new environments, existing structures and procedures that are effective.
Imperative for control: suggests that standardization of policies is used to reduce the complexity and uncertainty inherent in the control of international operations.
Two views have been used to examine the relationship of individuals to MNOs:
The roles of managers
The complexity of the global environment of MNOs emphasizes the key managerial roles of information exchange, coordination, information scanning, and control. The managers of subsidiaries in MNOs, because they function across internal and external organizational boundaries, perform this linking function and occupy these unique boundary-spanning roles.
Psychological contract and cultural differences
The unique characteristics of MNOs serve as one indicator of what is expected of organization members and what they can expect in return. The psychological contract consists of individual beliefs or perceptions concerning the terms of the exchange relationship between the individual and the organization.
The role that expatriates must take on is affected by the staffing strategy that the MNO has for its foreign operations. The fundamental preferences of MNOs for a particular staffing strategy have been:
Polycentric = Local foreign managers only.
Ethnocentric = Home country managers predominate.
Geocentric = A mix of nationalities at home and abroad.
Research found that firms transferred personnel internationally for one of three reasons:
to fill a technical requirement
to develop the manager
to develop the organization
Making a staffing decision is limited by a number of factors, including restrictions imposed by other organizational requirements and those imposed by the individuals themselves. Reasons for accepting an assignment (US people):
A sense of vocation.
Financial rewards.
The desire to escape undesirable circumstances at home.
Enhancing an international career.
Three definitions of success:
Turnover = The return of expatriates to their home country.
Adjustment = The ability of the expatriate to overcome culture shock and adjust to the new environment.
Honeymoon stage = everything is new, exciting, and interesting.
Culture shock stage = the expatriate becomes frustrated and confused because the environment is not providing familiar cues.
Adjustment stage = the expatriate begins to understand cultural differences, learns the ways to get things done, and begins to settle into the rhythm of daily living in the foreign country.
Mastery stage = the expatriate becomes able to function in the new culture almost as well as at home.
The cycle of adjustment, a U-shaped pattern, is shown in Figure 10.2 on page 211. The cycle shows four stages:
Not all expatriates achieve mastery in their new environment.
Task performance = the requirement that expatriates meet the often conflicting performance expectations of home office superiors and host nationals.
Several different effects of this relationship have been found, depending on the facet of adjustment and the measure of performance used, page 224.
The individual meets the performance expectations of quality and quantity of both home country and host country superiors.
The individual develops and maintains satisfactory relationships with local nationals.
The individual acquires skills related to managing people of different cultures.
The individual remains on assignment the agreed-upon length of time.
The behaviors or personal abilities that are considered important for success are:
The ability to manage psychological stress.
The ability to communicate effectively.
The ability to establish interpersonal relationships.
Besides that, five characteristics of individuals related to success are identified (in order of importance):
Family situation
Adaptability
Job knowledge
Relational ability
Openness to other cultures
Nationality of expatriates: the cultural background of the expatriates themselves, as well as the characteristics of the foreign culture, can influence some aspects of their overseas experience.
Expatriate job characteristics: work role characteristics have an influence on the work adjustment of expatriates. The amounts of ambiguity, novelty, and conflict in the expatriate’s role all have a negative effect on adjustment to a new work role and on job satisfaction.
Globalization is characterized by growing worldwide connections between organizations and their various constituencies, by rapid and discontinuous change, by growing numbers and diversity of actors involved in global activities, and by greater managerial complexity.
The uneven economic development round the globe has numerous implications for policy makers. These involve the stimulation of economic growth in various regions, the ethnic tensions that parallel economic capitalism and culture, and the extreme responses terrorists. Perhaps the most significant effect of the differences in development form a cross-cultural management perspective has to do with the impact on the labor pool. Economic development within nations affects the availability of wage-earning jobs. In developing countries, working hours are longer, part-time employment is high, and many people work several part-time jobs.
Job migration in concert with the growing need for knowledge workers will:
increase the number of women in the workforce,
increase the average age of workers,
increase the demand for people with higher levels of education worldwide.
Against the influence of globalization, managers in transition economies still exist in an environment that contains the vestiges of state socialism. The mark left by socialism includes:
Centralization and bureaucratic organization of power
A drive for production quantity over quality
Paternalistic behavior of superiors
Soft budget constraints
Weak responses to prices
Mechanisms to compensate for chronic shortages
A disregard for the external environment
Managers in transition economies are likely to be highly educated, to have a cultural profile, and to have to come to management from a wide range of backgrounds.
Information and communication technology involve two main activities:
processing information
transmitting it from one location to another
The three categories of adjustment to our thinking about cross-cultural management are:
Understanding the context of management in MNOs
The future of the organization of work
The development of global managers
The defining quality of MNOs as a context for management is that they actively manage assets in several nations rather than only engaging in market transactions across national boundaries. According to Peterson and Thomas, the MNO provides context that can have a unique effect in any of three ways:
Frequency of occurrence
Functional relationships
Unique constructs
Three areas of concern to international managers are apparent:
the work-family issues associated with overseas assignments,
the influence of different institutional arrangements around the world
the role of culture in balancing work and family.
There are three issues with regard to the development of global managers:
The changing nature of international management careers
The development of skills and abilities related to effective intercultural interactions
The role of bicultural individuals
Cross-cultural skills and abilities; the characteristics of effective intercultural interaction are:
Good personal adjustment
Good interpersonal relationships with culturally different others
Completion of task-related goals
Biculturals: have a dual pattern of identification with different cultures. That is, they have more cognitively complex cultural representations than do mono-culturals.
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Summaries and study assistance with the 4th edition of the book:
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Summary with the 3rd edition of Cross-Cultural Management: Essential concepts by Thomas and Peterson“Dramatic shifts in economics, politics and technology shape the role of the international manager. These shifts are often encapsulated in the term ‘globalization’.” (Thomas and Peterson, 2015)
Globalization = A process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration/unity worldwide; others do not. The increase in interconnections is the result of shifts that have taken place in technological, political, and economic spheres.
Four categories of change that illustrate the process of globalization:
Growing economic interconnectedness; Causes of a greater degree of interconnectedness are:
The establishment of free trade areas. The three largest trade groups are the European Union, the North American Free Trade Agreement, and the Asia-Pacific Economic Cooperation.
The World Trade Organization established with the goal of reducing tariffs and liberalizing trade across the board. Therefore, local economic conditions are no longer the result of purely domestic influence.
The gap between regional GDP growth rates of the fastest-growing and least dynamic regions of the world has begun to narrow.
The level of FDI also has a globalizing effect. FDI, as a percentage of the world GDP, doubled between 1985 and 1994. The result of these changes in trade and FDI flows is a shift in the economic center of the world away from North America and Western Europe.
Effects of greater degree of interconnectedness are
Organizational boundaries are not limited by a country’s boundaries. Certain parts of the organization might be located in different countries to capitalize on certain location specific advantages.
This effect is stimulated by the emergence of virtual organizations (Recap: Information Systems Management) in which employees do not meet face to face but are linked by computer technology.
Multinational firms now manufacture and sell globally on an unprecedented
scale, and the expansion of international production continues to gather momentum.
More complex and dynamic work environment; Causes of globalization that affect the stability of the work
BulletPoint summary with the 3rd edition of Cross-Cultural Management: Essential concepts by Thomas and PetersonGlobalization = A process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration/unity worldwide; others do not. The increase in interconnections is the result of shifts that have taken place in technological, political, and economic spheres.
Four categories of change that illustrate the process of globalization:
Growing economic interconnectedness
More complex and dynamic work environment; Causes of globalization that affect the stability of the work environment within organizations are
Increased use and sophistication of information technology;
More and different players on the global stage
The elements of the global manager’s environment can be divided into four categories: economic, legal, political, and cultural.
Management = Managers have formal authority over their organizational unit and this status divides their activities into interpersonal, informational, and decisional role categories. Mintzberg’s framework identifies ten role categories of managers.
Types of international management research (for a summarizing table for all types of management research, their cultural assumptions and key research questions, refer to Table 1.3 on page 14.):
Domestic research = Studies that are designed and conducted within a single country without regard for the boundary conditions set by the cultural orientation of the country. Constraint in both its ability to advance theory and its practical application.
Replication research = Studies that are conceived and managed by a researcher in one country and then repeated in other countries by the originator or by local collaborators. They assume that the responses in the two cultures can be compared directly.
Indigenous research = Studies that focus on the varied ways in which managers behave and organizations are run in a variety of specific cultural settings. They assume cultural differences and the research is conducted within a single country.
Comparative research = Studies that seek to find both the similarities and the differences that exist across cultures regarding a particular management issue. Important is that researchers
Lecture Notes 2016/2017: Cross-Cultural Management - RUGIt is not so much a managerial functional activity or specialized field (finance, HRM, logistics, marketing...).
Within these functions, increased cross-border variety redefines existing managerial activities and introduces new managerial issues. For instance:
Who will be in charge of subsidiary X in country Y?
Where do we build a new factory?
How to manage multicultural teams (costs/benefits)?
How do I handle my boss who comes from another country?
Developing global managers: cultural skills and competences or even cultural intelligence?
Where do you find cross-cultural interactions in the managerial world? Where takes the encounter place?
Manager – manager / employee - employee
Manager – employee
Board member - manager
Shareholder – board member
Client – employee
Manager – consultants
Expat family – local living conditions
Impats – ....
Over time the relevance/likelyhood of these encounters changes.
A variety of options with different problems, dynamics and consequences.
History of “culture” concept:
Long history in philosophy and social sciences (anthropology, sociology, psychology, economics).
Basic issue: distinction between nature and society.
Culture is `... that which distinguishes men from animals ...’( Ostwald 1907).
... `While human nature is biologically innate and universal, culture is learned and may vary from one society to another’ ... (Inglehart 1990).
The more people start crossing borders, the more they are confronted with cultural differences between groups of people
Issue with a very long history
Roman empire, crusades, Catholic church, Dzjengis Khan, colonial empires (VOC!), WW1, interbellum globalization, WW 2, .... and nowadays, multinational companies and global institutions as the United Nations.
The forces of culture run deep and far in a society: further than you think. For instance: `individualism’?
'The quality of being an individual; individuality“ related to possessing 'An individual characteristic; a quirk.“ Individualism is thus also associated with artistic and bohemian interests and lifestyles where there is a tendency towards self-creation and experimentation as opposed to tradition or popular mass opinions and behaviours ....”
Differences between The Netherlands and other countries in how they value “individualism”? The Netherlands scores quite high on ‘Individualism/Collectivism’ dimensions.
However, the Exactitude project shows that we are still very much the same.
Conclusion
So what is left of ‘individualism’ here ?
People adapt to the “images” they have in their
Practice Exam 2015/2016: Cross-Cultural Management - RUGThis is the text of a lecture Renan gave in 1882 in Leiden, The Netherlands. It was a time when the nation state was developing quickly which finally led to World War I. It is not an easy text, but it is famous ever since. And for good reasons. Most importantly, Renan discusses some essential ideas people had and (still) have related to the genesis and nature of `nations’. More in particular, Renan is rather specific on the limits of teleological and deterministic views on nation building processes. His arguments leads him to conclusions with far reaching consequences (and predictions).(He foresaw the establishment of the European Union!).
In the Cross-Cultural Management course, we mainly focused on cultural differences. These cultural differences, however, are often related directly to differences between nations. Think for instance about dimensions of Hofstede and the GLOBE project which ascribe cultural characteristics to national identities.
To guide you through the complexities and many details, we formulate three questions about the text of Renan. The questions are given below. You can try to answer these when you are reading the text, so before the examination. One or two of these questions will be used in the examination. So discuss with your friends and remember your answers well!
If Renan was confronted with the 6 cultural dimensions of Geert Hofstede, how do you think he would respond? Would he see these dimensions as an important building block for nation building processes? Or would he be skeptical about their validity? Why do you think this is the case?
According to Renan, what is a nation? And what are, according to Renan, not sufficient arguments to explain the establishment of modern nationalities?
Looking at the Dutch national anthem, would Renan see its text as a further proof/reflection of the points he wanted to raise in his lecture? Or would he oppose this text and argue that it is based on the arguments/ assumptions he opposes against? Please argue why.
Hofstede has Power Distance, Masc.-Fem., Ind.-Col., Uncertainty av., Short/Long term orientation, indulgence - Self-restraint.
Depending on how you phrase it, you can go both ways. Here is an option:
Renan would be skeptical because he believes that the nation is a spiritual principle formed through past experiences and the present. He would say that even if people differ, that such experiences would bring them together. As such, the cultural distance by Hofstede only explains how nations differ in 6 dimensions and not what made them as a nation, nor what forms them as a nation. the 6 dimensions thus cannot be seen as building blocks,
.....read more
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