Chapter 4

1. Chapter 4 Managing Within Cultural Contexts

2. Learning Objectives • Explain why a thorough understanding of culture is important for all mangers. • Define culture. • Explain how culture affects managerial behavior and practices. After studying this chapter, you should be able to:

3. Learning Objectives • Describe the role of fundamental assumptions in corporate, regional, or national cultures. • Map aspects of culture in terms of the extent to which they are deeply held and widely shared. After studying this chapter, you should be able to:

4. Learning Objectives • Describe the key strategies managers can use to create and change culture. • Explain the differences between and describe the implications of high‑ and low‑context cultures. After studying this chapter, you should be able to:

5. Definition of Culture • Culture • Learned set of assumptions, values, and behaviors • Accepted as successful • Passed on to new comers • Culture begins when a group of people faces a set of challenges • Culture evolves and changes with time

6. Managerial Relevance of Culture • Impact of Culture on Behavior • How people observe and interpret the business world around them • Can lead to different beliefs about “right” behaviors • Subordinates who identify with the culture of a unit or company are likely to try harder to make it successful

7. 80% 70% 60% 50% 40% 30% 20% 10% 0% Cultural Differences Among Managers 78 73 66 “It is important for a manager to have at hand precise answers to most of the questions his/her subordinates may raise about their work.” 53 46 44 38 27 23 18 17 10 UK USA Italy Japan France Sweden Holland Belgium Germany Denmark Indonesia Switzerland Adapted from Exhibit 4.1: Cultural Differences Among Managers

8. Managerial Relevance of Culture • Cultural diversity in the workplace • Globalization • Increasingly culturally diverse U.S. workforce • Culture as a management tool • Once established, culture guides employee behaviors without overt or constant supervision • Managers must be careful what they instill as the cultural values of the unit (organization)

9. Levels of Culture • Artifacts: visible manifestations of a culture such as its art, clothing, food, architecture, and customs • Values: enduring beliefs that specific conduct or end states which are personally or socially preferred to others • Assumptions: the beliefs about fundamental aspects of life lying below the surface, but supporting the culture Adapted from Exhibit 4.2: Managing Within Cultural Contexts

10. Assumptions (Hidden) Levels of Culture • Cultural assumptions • Certain cultural values and behaviors are only possible with certain underlying cultural assumptions • An understanding of assumptions is necessary to understand, change, or even create a new culture

11. Basic Assumptions and Their Managerial Assumptions Specific Assumptions Specific Assumptions People must coexist harmon-iously with the environment Humans and the Environment People are meant to dominate the environment Managerial Implications Managerial Implications Strategic plans should be developed to enable the firm to dominate its industry Firms should seek positions that allow them to coexist with others Adapted from Exhibit 4.3: Basic Assumptions and Their Management Implications

12. Basic Assumptions and Their Managerial Assumptions Specific Assumptions Specific Assumptions Work is as natural as play for people People are generally lazy Human Nature Managerial Implications Managerial Implications Implement systems for monitoring be-havior and establish clear punishment for undesired behavior Provide people with opportunities and responsibilities and encourage their development Adapted from Exhibit 4.3: Basic Assumptions and Their Management Implications

13. Basic Assumptions and Their Managerial Assumptions Specific Assumptions Specific Assumptions People exist because of others and owe an obligation to them Individuals have certain rights and freedoms Human Relationships Managerial Implications Managerial Implications Cooperation with and contributions to the’ group should be evaluated and rewarded Individual performance should be measured and rewarded Adapted from Exhibit 4.3: Basic Assumptions and Their Management Implications

14. Basic Assumptions and Their Managerial Assumptions Specific Assumptions Specific Assumptions People should react to and enjoy whatever the present provides People create their own destinies and must plan for the future Human Activity Managerial Implications Managerial Implications Planning the future only gets in the way of enjoying the present People who fail to plan should plan to fail Adapted from Exhibit 4.3: Basic Assumptions and Their Management Implications

15. Basic Assumptions and Their Managerial Assumptions Specific Assumptions Specific Assumptions Truth is what is socially accepted Truth objectively exists Truth and Reality Managerial Implications Managerial Implications Opinion leaders are how you influence people and decisions Facts and statistics are how you convince and influence people Adapted from Exhibit 4.3: Basic Assumptions and Their Management Implications

16. Basic Assumptions and Their Managerial Assumptions Specific Assumptions Specific Assumptions Time is like a lake, what you don’t use today will be there tomorrow Time is like a river, what you don’t use wisely today is gone forever Time Managerial Implications Managerial Implications Time management is a critical skill. Appointments are made well in advance and punctuality is valued Taking advantage of the moment is valued. Arriving late for appointments is not a character flaw Adapted from Exhibit 4.3: Basic Assumptions and Their Management Implications

17. Values Levels of Culture • Cultural Values • Enduring beliefs that specific conduct or end states of existence are personally and socially preferred to others • Managerial values are enduring beliefs about specific ways of managing and conducting business that are deemed successful enough to be passed on

18. Should we dominate the environment? How right is logging, mining or building dams? Are people basically good or evil? Are workers basically self-motivated or lazy? Humanity’s Relationship to the Environment Nature of Human Nature Humanity’s Relationship to the Environment Should people be treated as equals? Are hierarchical and status difference right and natural? Are individuals more important than groups? Should individual interests be subjected to those of the group? Questions to Get at Cultural Assumptions Adapted from Exhibit 4.4: Questions to Get at Cultural Assumptions

19. Is worth assessed through activity and accomplishment? Are inner states of mind and well-being more important than outward deeds? Nature of Human Activity Nature of Truth Nature of Time Is truth objective or does it depend on the eye of the beholder? Are facts the way to persuade people? Is time like a river and what you don’t use today will be gone tomorrow? Is time like a lake and what you don’t use today will be there tomorrow? Questions to Get at Cultural Assumptions Adapted from Exhibit 4.4: Questions to Get at Cultural Assumptions

20. Classification of Values Theoretical people Value the discovery of truth. They are empirical, critical, and rational, aiming to order and systematize their knowledge. Economic people Value what is useful. They are interested in practical affairs, especially those of business, judging things by their usefulness Aesthetic people Value beauty and harmony. They are concerned with grade and symmetry, finding fulfillment in artistic experiences. Adapted from Exhibit 4.5: Classification of Values

21. Classification of Values Social people Value altruistic and philanthropic love. They are kind, sympathetic, and unselfish, valuing other people as ends in themselves. Religious people Value unity. They seek communication with the cosmos, mystically relating to its wholeness. Source: G. W. Allport, P. E. Vernon, and Q. Lindzey, A study of Values (Boston: Houghton Mifflin, 1966. Adapted from Exhibit 4.5: Classification of Values

22. Artifacts (visible) Levels of Culture • Cultural Artifacts andBehavior • In modern organizations, important artifacts include • Office arrangements (individual offices for all versus open offices with no walls) • Parking arrangements (reserved spaces for some versus open spaces for all) • Clothing (individual suits versus uniforms)

23. Culture A Culture B Plan for every possible contingency. Develop a plan jointly with boss. Accept unexpected surprises. Develop a plan and then seek boss’s approval Structure department strictly by hierarchy. Communicate frequently face to face and rarely use e-mail. Organize department into free-flowing teams. Communicate infrequently face to face and frequently by e-mail. Culture and Managerial Behaviors Managerial Activity Planning Organizing Adapted from Exhibit 4.6: Culture and Managerial Behaviors

24. Culture A Culture B Involve subordinates in decision process. Allow subordinates to solve their own problems. Inform subordinates of decisions. Intervene when there are disputes. Closely monitor activities and directly guide behavior. Emphasize financial results in evaluating performance. Evaluate and then reward based on results. Focus on customer satisfaction in evaluations. Culture and Managerial Behaviors Managerial Activity Leading Controlling Adapted from Exhibit 4.6: Culture and Managerial Behaviors

25. Cultural Diversity • Diversity comes from two primary sources • Increased international activity of organizations • Greater diversity in the cultures of employees • Diversity includes differences in • Age, race, ethnicity, gender, physical abilities, and sexual orientation • Work background, income, marital status, military experience, religious beliefs, geographic location, parental status, and education

26. Many Few Low Performance High Performance Cultural Diversity • Number of Groups Adapted from Exhibit 4.7: Effects of Cultural Diversity on Productivity

27. Strong and Weak Cultures • The strength of cultures varies along two dimensions • The extent to which they are are widely shared among group members • The extent to which they are deeply held • Subculture • Cultural values are deeply held but not widely shared

28. Managing Cultural Diversity for Competitive Advantage • Cost As organizations become more diverse, the cost of a poor job in integrating workers will increase. Resource Acquisition Companies with the best reputations for managing diversity will win the competition for the best personnel. As the labor pool shrinks and becomes more diverse, this edge will become increasingly important. Marketing For multinational organizations, the insight and cultural sensitivity that members with roots in other cultures bring should improve marketing efforts. Adapted from Exhibit 4.8: Managing Cultural Diversity for Competitive Advantage

29. Managing Cultural Diversity for Competitive Advantage Creativity Diversity of perspectives and less emphasis on conformity to norms of the past should improve creativity. Cultural diversity in decision and problem solving groups potentially produces better decisions through consideration of a wider range of and more thorough critical analysis of issues. Problem Solving System Flexibility Cultural diversity enables the system to be less determinant, less standardized, and therefore more fluid, which will create more flexibility to react to environmental chang4es. Source: T. H. Cox and S. Blake, “Managing Cultural Diversity: Implications for Organizational Competitiveness,” Academy of Management Executive 5, no. 3 (1991), p. 23. Adapted from Exhibit 4.8: Managing Cultural Diversity for Competitive Advantage

30. Deep Shallow Narrow Wide Strong and Weak Cultures Values held Narrowly Shared Deeply Held Violation of these values usually results in informal but significant sanctions Widely Shared Deeply Held Violation of these values usually results in formal but significant sanctions Narrowly Shared Shallowly Held Violation of these values usually results in sanctions that are inconsistent Widely Shared Shallowly Held Violation of these values usually results in minor sanctions or second chances Values Shared Adapted from Exhibit 4.9: Matrix of Cultural Strength

31. Strong and Weak Cultures • Core value • A specific behavior that is • Widely shared • Deeply held • Directly related to one or more of the six fundamental assumptions • Difficult to change

32. Selection • Socialization • Performance appraisal • Rewards and Compensation • Stories and Symbols Creating and Changing Organization Culture • To create and reinforce a particular set of values or corporate culture • Alignment between desired values and other systems in the organization needs to exist • Five critical strategies to effectively manage organizational culture

33. Creating and Changing Organization Culture • Selection • Select individuals whose assumptions, values, and behaviors already match those you desire Selection Adapted from Exhibit 4.10: Strategies to Manage Organizational Culture

34. Creating and Changing Organization Culture • Socialization • Orientation • Training • Arranged interactions with experienced organizational members Selection Socialization Adapted from Exhibit 4.10: Strategies to Manage Organizational Culture

35. Creating and Changing Organization Culture • Performance Appraisal • Clarify for new employees what the organization measures and evaluates Selection Socialization Performance Appraisal Adapted from Exhibit 4.10: Strategies to Manage Organizational Culture

36. Creating and Changing Organization Culture • Rewards and Compensation • Signal what the organization values by reinforcing desired behaviors in newcomers Selection Socialization Rewards & Compensation Performance Appraisal Adapted from Exhibit 4.10: Strategies to Manage Organizational Culture

37. Creating and Changing Organization Culture • Stories and Symbols • Stories communicate company values • Rituals play a key role in the symbolic communication of an organization’s culture Selection Stories & Symbols Socialization Rewards & Compensation Performance Appraisal Adapted from Exhibit 4.10: Strategies to Manage Organizational Culture

38. International Contexts and Cultures • Cultural context: degree to which a situation influences behavior or perception of “appropriateness” • In high-context cultures, people pay close attention to the situation and its various elements in assessing appropriate behavior • In low-context cultures, the situation may or may not make a difference in what is considered appropriate behavior • Neither high nor low-context cultures are right or wrong, just different