Implications of culture on managerial styles and decision-making

1. Implications of culture on managerial styles and decision-making Dr. Indrė Pikturnienė Vilnius University, Faculty of Economics, Department of Marketing indre.pikturniene@ef.vu.lt

2. Managerial styles in different cultures Vary substantially among countries; Are based on values managers hold and their ability to motivate employees; Failure to select proper managerial style for the particular culture leads to conflicts, unmotivated personnel, and/or ineffectiveness in activity.

3. Aspects of management • Managing authority • Relationships • Personal fit within organization • Certainty • Time • Status vs. competence (who someone is vs. what someone does/knows); • Power distance: • Large: “a place for everyone and everyone in their place”; • Weak: inequality is minimized, subordinates participate.

4. Managerial implications (Power Distance, PD) • Large PD: • Managers are expected to function as autocrats who know a lot. Efforts to involve subordinates in decision making are taken as weakness and insufficient competence. • “Being” cultures with large PD favor warm, paternal relationships with superiors. “Doing” cultures with large PD (Japan) expect managers to be autocratic but to build consensus among subordinates. • Dress according to the position. • Weak PD: • Subordinates expect participation, little direct supervision. Compensation differentials are smaller. • Dress as “one of a guys”.

5. Aspects of management • Managing authority • Relationships • Personal fit within organization • Certainty • Time • Familism. • East: more tendency to prefer family members, friends, their family members, and family members’ friends. • West: impersonal treatment, organization and family/friends are clearly distinguished. • Individualism/collectivism Correlates with familism

6. Aspects of management • Trust: • High familism: concentrates within family relationships; friends, face-to-face contact is necessary to develop trust. • Low familism: no personal relationship is necessary; written agreements, instructions, credentials compensate them. People are regarded as more or less trustworthy. • Managing authority • Relationships • Personal fit within organization • Certainty • Time

7. Managerial implications (Collectivism) • If collectivism is high: • Recognize dominant collective unit; • Manage not individuals, but groups: not single out individuals, reward group performance, apply lower compensation differences between levels. • Take into account membership when hiring, promoting, making decisions. Nepotism might be the norm. • Individuals might feel compelled to act in the interests of the group. • Family organizations are effective.

8. Aspects of management • Managing authority • Relationships • Personal fit within organization • Certainty • Time • Communication: • High context: implicit meanings: who says, what body language uses, pauses, nuances (Japanese, Arabs). • Low context: explicitly used words (Anglos, Germanics, Scandinavians).

9. Aspects of management • Managing authority • Relationships • Personal fit within organization • Certainty • Time • Achievement vs. social compatibility (doing vs. being, achieving vs. experiencing): • Masculinity: Members are ambitious (achievement, doing). Gender roles diverse. • Femininity: Experiencing, fitting in, being. Work to live, not live to work. Gender roles blur.

10. Managerial implications (Masculinity) • Feminine cultures: • Direct or indirect asking to trade personal life vs. more work (and better pay/promotion) might not seem suitable. • Motivators are good relationship, secure employment, desirable residence area, time for personal life. • Female and male managers are equally valued. • Masculine cultures: • Motivators are promotion, challenging work, chance for high earnings, individual recognition. • Sending a woman manager to higher MAS countries: middle level managers in high MAS countries are aware of gender roles equality abroad. However, additional communication is recommended.

11. Aspects of management • To what extend people try to make life more certain: • High uncertainty avoidance: rules work as certainty warrantors, there are many of them, they should not be broken. Hard work “guarantees “ better future. • Low uncertainty avoidance: less rules, more casual attitudes towards things that do not work as planned. • To what extend people suppose that nothing/everything depends on them: • Fatalism: life is more or less determined by higher powers. • Managing authority • Relationships • Personal fit within organization • Certainty • Time

12. Managerial implications • Strong uncertainty avoidance: • Workers desire more structure and order and are less receptive to deviation from precedent or rules and to innovation and new ideas. • Things that are different are best avoided. • Job security is a strong motivator. • Strong fatalism: • Difficult for people to understand the point of setting goals, developing detailed long-range plans, or taking major initiatives.

13. Aspects of management • Present, past, or future: • Past orientated: Traditional values, long standing customs. Business meetings start from review what has been done. Organizations slow to change. (British, Indian, Chinese). • Present orientated (immedialist cultures): here and now, short –term benefits (Latin Americans). • Future orientated: comparative optimism that things can be changed for better (Americans). • Managing authority • Relationships • Personal fit within organization • Certainty • Time

14. Aspects of management: Managing time (II) • Time finite or infinite: • Finite: “Time is money”. Time flashes in linear form: one activity at once; time can hardly be “borrowed” from other activities (Westerns). • Infinite: Many things can be done at once. If necessary, time can be “taken” by pushing aside other arrangements or combining them. • Managing authority • Relationships • Personal fit within organization • Certainty • Time

15. Managerial implications • Time infinite and polychronic: • Take time to build social relationships, that are great part of doing business. • Projects are not supposed to be planned in a strictly linear form. • Get used to different time treatment and manners.

16. Managerial and motivation theories: culture biased (?) • Motivation: • Abraham Maslow hierarchy of needs; • David McClelland: achievement, power and affiliation; • Frederick Herzberg two-factor model; • Expectancy theory; • Managerial theories: • X, Y, Z theory • Managerial grid See Annex No. 1 for the summary of theories.

17. Cultural variations in decision making steps 1. Recognize the problem 2. Define goal/objectives 3. Information search 4. Construct/assess the alternatives 5. Choose the best alternative 6. Implement • When a problems is a problem? • Proactive cultures: • Problem solving: we should change the situation • Fatalist cultures: • Situation acceptance: Some situations should be accepted as they are

18. Cultural variations in decision making steps 1. Recognize the problem 2. Define goal/objectives 3. Information search 4. Construct/assess the alternatives 5. Choose the best alternative 6. Implement • Individual or collective goals: Does society place primary value on individual rights or group and social harmony? • In individualistic cultures, the rights of individuals take precedence over the group.

19. Cultural variations in decision making steps 1. Recognize the problem 2. Define goal/objectives 3. Information search 4. Construct/assess the alternatives 5. Choose the best alternative 6. Implement • Gathering facts in a systematic manner (objectivity) • Or • Gathering ideas or possibilities. Intuition. • How complete should be the information to reach the decision?

20. Cultural variations in decision making steps 1. Recognize the problem 2. Define goal/objectives 3. Information search 4. Construct/assess the alternatives 5. Choose the best alternative 6. Implement • New, future oriented alternatives: adults can learn and change • Or • Past-, present-oriented alternatives: adults cannot change substantially

21. Cultural variations in decision making steps • Who makes the decision: group or individual, higher level manager, or lower level manager. • Centralisationvs. decentralization of decisions. • How quickly decision is made? • Decision rule: • is it true or false vs. • is it good or bad? • How much risk is tolerated? • How ambiguous the decision can be? 1. Recognize the problem 2. Define goal/objectives 3. Information search 4. Construct/assess the alternatives 5. Choose the best alternative 6. Implement

22. Cultural variations in decision making steps 1. Recognize the problem 2. Define goal/objectives 3. Information search 4. Construct/assess the alternatives 5. Choose the best alternative 6. Implement • Slow: management from the top, responsibility of one person • or • Fast: Involves participation in all levels, responsibility of a group

23. Questions welcome Check annex No. 3 for references