MGT 131 Ch.6

there are three aspects of organizational functioning that seem to be especially important in determining MNC organizational culture:

(1) the general relationship between the employees and their organization; (2) the hierarchical system of authority that defines the roles of managers and subordinates; (3) the general views that employees hold about the MNC's purpose, destiny, goals, and their place in them.

There are a number of ways that diverse groups can be categorized. Four of the most common include:

1. Homogeneous groups 2. Token groups 3. Bicultural groups 4. Multicultural groups

Organizational culture characteristics

1. Observed behavioral regularities, as typified by common language, terminology, and rituals. 2. Norms, as reflected by things such as the amount of work to be done and the degree of cooperation between management and employees. 3. Dominant values that the organization advocates and expects participants to share, such as high product and service quality, low absenteeism, and high efficiency. 4. A philosophy that is set forth in the MNC's beliefs regarding how employees and customers should be treated. 5. Rules that dictate the dos and don'ts of employee behavior relating to areas such as productivity, customer relations, and intergroup cooperation. 6. Organizational climate, or the overall atmosphere of the enterprise, as reflected by the way that participants interact with each other, conduct themselves with customers, and feel about the way they are treated by higher-level management.20

Numeroff and Abrahams have suggested that there are four steps that are critical in this process (mergers or acquisition):

1. The two groups have to establish the purpose, goal, and focus of their merger. 2. Then they have to develop mechanisms to identify the most important organizational structures and management roles. 3. They have to determine who has authority over the resources needed for getting things done. 4. They have to identify the expectations of all involved parties and facilitate communication between both departments and individuals in the structure.

Motivation

Activities vs Outputs

Token Groups

All members but one have the same background.

Conduct

Conventional vs Pragmatic

Identity

Corporate vs Professional

Phase I

Domestic Corporations international cultural diversity has minimal impact on domestic organizations, although domestic multiculturalism has a highly significant impact.

Phase IV

Global Corporations the impact of culture again becomes extremely important

Multicultural Groups

Individuals from three or more different ethnic backgrounds

Phase II

International Corporations must adapt their approach and products to those of the local market.

Relationship

Job vs Person

Dimensions of Corporate Culture

Motivation Relationship Identity Communication Control Conduct

Phase III

Multinational Corporation often find that price tends to dominate all other considerations and the direct impact of culture may lessen slightly.

When examining these dimensions of organizational culture, Trompenaars suggested the use of two continua:

One distinguishes between equity and hierarchy; the other examines orientation to the person and the task.

Communication

Open vs Closed

Control

Tight vs Loose

Bicultural Groups

Two or more members represent each of two distinct cultures

Family culture is characterized by a strong emphasis on hierarchy and orientation to the person. The result is a family-type environment that is power-oriented and headed by...

a leader who is regarded as a caring parent and one who knows what is best for the personnel.

incubator cultures often create environments where participants thrive on....

an intense, emotional commitment to the nature of the work.

In the entry stage, the focus should be on...

building trust and developing team cohesion

One main benefit of diversity is the generation of more and better ideas. Because group members come from a variety of cultures, they often are able to...

create a greater number of unique (and thus creative) solutions and recommendations.

Given that many recent international expansions are a result of mergers or acquisition, the integration of these organizational cultures is a...

critical concern in international management.

Organizational cultures of MNCs are shaped by a number of factors, including the...

cultural preferences of the leaders and employees.

In the action stage, the focus shifts to...

decision making and implementation. This can be a difficult phase because it often requires consensus building among the members.

In the work stage of development, attention may be directed more toward...

describing and analyzing the problem or task that has been assigned.

Hofstede's research found that the national cultural values of employees have a significant impact on their organizational performance and that the cultural values employees bring to the workplace with them are not...

easily changed by the organization.

Trompenaars identifies four different types of organizational cultures:

family, Eiffel Tower, guided missile, and incubator.

A second major benefit is that culturally diverse groups can prevent...

groupthink

Groupthink is caused by social conformity and pressures on...

individual members of a group to conform and reach consensus

Eiffel Tower culture is characterized by strong emphasis on hierarchy and orientation to the task. Under this organizational culture, jobs are well defined, employees know what they are supposed to do, and everything is coordinated from the top. As a result, this culture—like the Eiffel Tower itself—....

is steep, narrow at the top, and broad at the base.

Homogeneous groups

members have similar backgrounds and generally perceive, interpret, and evaluate events in similar ways.

There is a widely held belief that organizational culture tends to...

moderate or erase the impact of national culture.

Andre Laurent's research supports Hofstede's conclusions. He found that cultural differences are actually more pronounced among foreign employees working within the same multinational organization than among... personnel working for firms in their native lands.

personnel working for firms in their native lands.

For example, the group may be in the process of gene splitting that could lead to radical medical breakthroughs and extend life. Often, personnel in such cultures are overworked, and the enterprise typically is underfunded. As breakthroughs occur and the company gains stability, however, it starts moving down the road toward commercialization and profit. In turn, this engenders the need to hire more people and develop formalized procedures for ensuring the smooth flow of operations. In this process of growth and maturity, the unique characteristics of the incubator culture begin to wane and disappear, and the culture is...

replaced by one of the other types (family, Eiffel Tower, or guided missile).

There is growing evidence that culturally diverse groups can enhance creativity, lead to better decisions, and...

result in more effective and productive performance.

Incubator culture is the fourth major type of organizational culture that Trompenaars identified, and it is characterized by strong emphasis on equality and personal orientation. This culture is based heavily on the existential idea that organizations per se are...

secondary to the fulfillment of the individuals within them.

To achieve the greatest effectiveness from diverse teams, the focus of attention must be determined by the...

stage of team development (e.g., entry, working, and action stages).

Multicultural teams are most effective when they face...

tasks requiring innovativeness.

A more detailed definition is offered by organizational cultural theorist Edgar Schein, who defines it as a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and, therefore, to be...

taught to new members as the correct way to perceive, think, and feel in relation to those problems

The effect of multiculturalism and diversity will vary depending on...

the stage of the firm in its international evolution.

Organizational culture can be defined as the shared values and beliefs that enable members to..

understand their roles in and the norms of the organization.

Guided missile culture is characterized by strong emphasis on equality in the workplace and orientation to the task. This organizational culture is oriented to work, which typically is...

undertaken by teams or project groups.