Summary Managing People in a Global Context
Book: Managing across cultures by Schneider & Barsoux, second edition
Chapter 1: The undertow of culture
Converging cultures? Before the impact of culture can be assessed, two convergence myths have to be challenged: 1. The world is getting smaller… • On the surface, we appear to be converging: television, books, movies, internet, eating habits etc. • However, it seems that the pressure for convergence or integration may in fact create an equal, if not stronger pressure for divergence or fragmentation. o E.g. protests against learning English as second language in Switzerland, different neighborhoods in NYC (Chinatown, Little Italy etc.). o Executives across Europe are reading many of the same publications, but still more often they read national magazines and newspapers. Management is management • Management is management, consisting of a set of principles and techniques that can be universally applied. • However, different practices (such as management) are shaped by its cultural origins, and so is management. • Also, different notions of organizations (relationships vs. tasks) and different HRM practices based on motivations of employees (intrinsic vs. extrinsic). • Good management is culturally sensitive management: best fit between people’s motivation and tasks. • Sensitivity towards invasion of foreign companies and their business ideologies and practices.
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Despite technological & economic forces for integration/convergence, there are equal or greater forces for fragmentation, one of them being culture. Culture as a source of competitive advantage/disadvantage • Culture can provide source of competitive advantage (Michael Porter): availability of resources, size and sophistication of the market, nature of government intervention and type of strategic linkages/networks. Culture & institutional configurations competitive (dis)advantage (e.g. nature of education system in France industrial innovations such as TGV). Managers need to evaluate the extent to which national culture can interfere with the company’s efforts to respond to strategic requirements. Culture differences are the biggest source of difficulty in integrating acquisitions.
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Recognizing cultures
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When operating internationally, it is important to recognize what matters to another culture and how others may respond to your own culture. Not an easy task to describe your own culture. Perceiving your own culture by going abroad or introducing an outsider. Two dangers when discussing cultural differences: conflicts and stereotyping.
Stereotyping • Mental files that are used to help process new information by comparing it with past experience and knowledge. • Simplification of current reality. • Start from stereotypes, but be open and adjust your ideas on the basis of new learnings. • National characteristics are normal curves. • Culture is not a recipe book! Discorvering cultural advantage • • • Using Johari Window National identity & image important consequences for country’s role in global economic and political arena. Allowing differences to be open to discussion achieve insights instead of blind spots.
There is a difference between espoused theory (what people say) and theory in use (what people mean). Culture is founded upon basic assumptions
Artifacts, rituals & behavior Architecture & design • Sense of privacy (e.g. open vs. closed office design) • Number of executive dining rooms, elevators, washrooms, parking spaces etc. • Underlying assumptions: internal integration (bringing people together or keeping them apart) and external adaptation (harmonizing with or dominating nature) importance of hierarchy, collective rather than individual effort, preferred type of activity and interaction between people. Greeting rituals 2
• Important or less attention given to the protocol • Degree of body contact Forms of address • Use of (last) family names, the formal version of “you” and titles. o Can indicate hierarchy (e.g. in France) Making contact • Amount of physical space that is comfortable (larger in Northern Europe than Latin Europe). • Psychological: keeping personal and professional life apart. • Underlying assumptions: what is considered to be public vs. private space. Dress codes • Signaling degree of formality • Task orientation Written vs. verbal contracts • Importance of writing vs. someone’s word Artifacts, rituals & behaviors reflect underlying assumptions regarding external adaptation (how space is used, how strangers are dealt with, how contracts are established) and internal integration (how formal, what is the proper way of getting to know someone, how much personal distance is expected). Values & beliefs Criteria for success • Product quality (e.g. Germany) • Technological leadership (e.g. France) • Market share (e.g. Japan) What is management? • Getting things done through other people: task orientation • Developing people through work: spiritual & people-oriented orientation The right person for the job • Inferred from artifacts such as executive job advertisement • Different values & beliefs regarding qualifications for management • Depends on the notion of “success criteria” and “what is management?”’ Basic assumptions External adaptation (relationships with the environment) • Relationship with nature o Control over nature (e.g. “Insh’allah” (“if God wills”) indicates no control) o Importance of being in harmony with nature o Uncertainty avoidance: discomfort with uncertainty and preference for predictability and control planning rituals, schedules, belief in taking initiative and responsibility • Nature of human activity o Desirability of taking action: doing vs. being (depends on amount of perceived control) 3
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Achievement vs. ascription
Nature of truth and reality o Facts & figures (Anglo-Saxon cultures) o Feeling, intuition and spirituality
Internal integration (relationships among people) • Human nature o Are people basically good or evil? o Good: task orientation, more autonomy o Evil: external controls and supervision, relationship orientation • Relationships with people o Importance of task vs. relationships: universalism vs. particularism o Masculinity vs. femininity: assertiveness, competitiveness & materialism vs. quality of relationships and work life, nurturing and social well being o Hierarchy o Individualism vs. collectivism: self-interest vs. concern for group Linking assumptions: space, language time • Space o Physical: architecture & interior design o Managing public vs. private space in relationships • Language o High-context vs. low-context: communication dependent on person and situation vs. clear, direct and explicit communication o Artifacts, subjects of discussion and degree of expressiveness • Time o Monochronic vs. polychronic: structures in a sequential and linear fashion vs. several activities can happen concurrently; task oriented vs. relationship oriented; control over nature vs. no control over nature o Importance of past, present and future o Attitudes to change
Chapter 3: Interacting spheres of culture
Cultural spheres of influence interact in complex ways that limit the relevance of simple recipes for doing business in any particular country. These spheres can also provide competitive advantages and disadvantages. Regional cultures • Within national borders (e.g. the various “Länder” in Germany) o Regional cultures have evolved due to geography, history, political and economic forces, language and religion (e.g. regional identity of the Basques in the northeast of Spain). o Cultural differences between urban- and rural-based companies o Particular regions within countries can create competitive (dis)advantages • Beyond national borders (e.g. in Scandinavia) o Due to similarities among countries 4
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Country clusters have geographical, religious, linguistic and historical ties Patterns of trade between these countries Cultural similarities within clusters are much more significant in international business than formal economic groupings, such as the EU.
Industry cultures • Efforts to diversity may run into trouble due to cultural differences between industries. • Underlying assumptions regarding external adaptation (e.g. control over nature, amount of proactive and risk-taking behavior, time horizons) • Differences in industry culture are due to different task environments: o Nature of decision-making: degree of risk involved in decisions and the amount of time it takes to know the consequences of that decision. Bet your company: high risk, low speed feedback (e.g. biotechnology) Tough guy macho: high risk, high speed feedback (e.g. bond trading) Process: low risk, low speed feedback (e.g. accounting/consulting firms) Work hard, play hard: low risk, high speed feedback (e.g. retailing) o Product/market characteristics: degree of information sharing o Regulation: impact on market conditions, such as level of competition influences degree of customer orientation o Technology: due to government regulations o Sources of competitive advantage: e.g. concerns for efficiency, concerns for customer satisfaction, need for resources, developing people etc. • National & industry culture competitive advantage (e.g. Italian companies’ reputation for style) Professional cultures • Professionals acquire judgment through intensive training, supervision and socialization. • The need for professionalism is pushed further by the trend for organizations to become networks of specialists. • Professional cultures differ in what is considered proper behavior (e.g. dress codes for doctors) • Professionals differ in their values and beliefs (e.g. doctors and scientists different missions and methods regarding development of new medication) • National & professional culture: society signals which professions & occupations are valued over others (can be seen in status & salaries) • National & professional culture: some professional or occupational cultures are closely linked with particular countries (American MBA’s, German engineers etc.) • National, regional & professional culture: competitive advantage • Industry & professional culture: certain professionals may be valued above others (pharmaceutical industry: scientists, computer industry: engineers etc.) Functional cultures • Different functions (finance, production, marketing and R&D) have different cultures sometimes stereotyping and friction • Reasons for differences in functional cultures: o External environment: stakeholder demands (ways to achieve success), nature of the task (task variability, work flow integration), time frames (task interdependence: reciprocal vs. sequential) and customer demands. • Industry & functional culture: value of functions is determined by nature of the industry • Corporate & functional culture: some functions are valued over others • National & functional culture: the way functions are valued by different countries salaries 5
Corporate culture • Influenced by nature of the industry, bueiness and product • Often cited as the reason for failed strategic change efforts, alliances and attempts to internationalize • Corporate culture is constantly evolving • Reasons for differences between corporate cultures: o Role of founder: founders influence the culture of the company through their values and beliefs. However, these values may prove to be a handicap when the business environment demands change. o Leaders: need to be prepared to continue to make important changes in the culture as strategic demands change. o Administrative heritage: different structures, standard operating procedures or routines. o Stages of development: as companies grow, earlier more organic forms need to become more structured and systematic. o Nature of product: creating corporate culture & shaping evolution through subsequent interactions. • National & corporate culture: opportunities for competitive advantage (e.g. McDonald’s seen as American). • Corporate culture can be reinterpreted in different countries. • Corporate culture is sometimes supposed to overcome the influence of national identity, but this may backfire. Shimoni & Bergmann • Stop talking about cultures in terms of separate rounded off wholes • Better: hybridity: reshaping culture through interactions. • Corporations think in multicultural way: local managers translate outside culture to insiders in the company transformative change
Chapter 4: Culture and organization
What is culture? • Definition: the pattern of shared values, beliefs, and assumptions considered to be the appropriate way to think and act within an organization. o Gives members an organizational identity o Facilitates collective commitment and promotes organizational stability o Helps make sense of surroundings, provides orientation o Influences behavior o Defines boundaries Etic argument: organizational features (e.g. size & technology) structure Emic argument: society structure The historical and societal context needs to be considered to understand the adoption and diffusion of different forms of organization across countries.
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Culture & structure Hofstede dimensions • Individualism vs. collectivism: tendency of a culture’s norms and values to emphasize either satisfying personal needs or looking after the needs of the group. o Statistically related to country’s wealth • Power distance: the degree to which members of a society accept differences in power and status among themselves. o Related to degree of centralization of authority and degree of autocratic leadership o Collectivist countries always show large PD • Uncertainty avoidance: degree to which people are comfortable with ambiguous situations and with the inability to predict future events. o Uncertainty controlling institutions: technology, laws & religion • Masculinity vs. femininity: degree to which a culture is founded on values that emphasize independence, aggressiveness, dominance and physical strength or a society’s tendency to favor such values as interdependence, compassion, empathy and emotional openness. • Long term vs. short term orientation: the extent to which the members of a national culture are oriented towards the recent past and the present vs. oriented towards the future. • Indulgence vs. restraint: tendency to allow relatively free gratification of human desires related to enjoying life and having fun vs. reflecting that such gratification needs to be curbed and regulated by strict social norms. • There are several strengths and weaknesses on the Hofstede dimensions: o Strength: those surveyed were similar in every respect other than nationality. o Weakness: there cannot be 1 worldwide IBM culture o Weakness: conflation of nations with states: how about multinational states? o Weakness: conflation of national with microlocal: IBM is not the nation all crisp young white-shirted IBM men: a-typical for the national population So, Hofstede claims two unproven suppositions: o Within each nation there is a uniform national culture, however, there are more cultures (corporate, functional etc.) o Micro-level data from a section of IBM employees are representative of that national uniformity
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Organizational structure • Definition: A stable network of inter-connections among the people and tasks that make up an organization/the formal system of task and job reporting relationships. • The organizational structure is based on: o Differentiation: process of deciding how to divide the work o Integration: process of coordinating the different organizational parts • Several things can be looked at when trying to identify the organizational structure: o Work specialization o Departmentalization o Chain of command o Span of control o Centralization/decentralization o Formalization/standardization • Four cultural profiles can be distinguished, based on the amount of formalization (UAI) and centralization (PDI). 7
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Pyramid of people (e.g. France, Latin European countries) Well-oiled machine (e.g. Germany) Village market (e.g. Great Britain) Family (e.g. The Philippines)
Family • Centralized • Generalist approach • Paternalistic, strong values • Loyalty • Coordination through personal relationships • Social control Pyramid of people • Centralized • Highly specialized experts • Less delegation • Analytic ability • Coordination at top • Elitist (power and authority) • Input control
Village market • Decentralized, delegation • Generalist approach • People as free agents • Entrepreneurial, flexibility • Coordination through informal communication • Output control Well-oiled machine • Decentralized • Focus on expertise and knowledge (Vorstand) • Narrow spans of control • Functional organization • Coordination through routines and rules • Efficiency • Throughput control
Low FORMALIZATION High
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HIERARCHY
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Culture & processes Organizational processes: the systematic way a company defines, organizes and implements its operations. Policies & procedures • Formalization and standardization of policies and procedures may reflect low tolerance for uncertainty. • US: high tolerance for uncertainty, but standardized policies and job descriptions due to low-context communication and allows individuals to move easily in/out jobs • UK: detailed job descriptions due to volatile market. • Germany: no detailed job descriptions because Germans stay longer on the job and therefore, they are well-internalized. • Japan: less detailed job descriptions due to high context communication, general experience of managers and team organization. Systems & controls • Underlying assumptions regarding relationships with people (power & human nature [Theory X vs. Theory Y]) and relationships with nature (uncertainty and control). • Different perceptions on control. E.g. France: control derives from hierarchy; Britain: control through persuasion & negotiation different attitudes towards power • Different types of control: input (e.g. France: grande écoles), output (e.g. US: budgets, financial controls and reporting procedures) & throughput (e.g. Germany: developing managers through job-specific experience).
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Different types of planning practices: UK: strategic; Germany: operational; France: shortterm, less participative and more administrative different assumptions of uncertainty avoidance Information & communication • Reflecting cultural preferences for hierarchy, formalization and participation. • France: information is viewed as personal, not public. • Sweden: more open and informal communication patterns, due to egalitarian approach and low level of uncertainty avoidance. • Japan: creating a “learning company” by maximizing informal exchange of information. • Encouraging information sharing by office design, building layout and information technology. • Use of physical space and patterns of interaction: beliefs regarding optimal degree of hierarchy, formalization and level of participation information as instrumental vs. political • Decision making • Who makes the decision, who is involved in this process, where are these decisions made and what is the speed of decision making? • Sweden: participation in decision making (less hierarchy); decision making requires seeking consensus (union leaders in management board); managers do not often supervise employees directly. • Netherlands/Germany: work councils & labor representation: commitment to consensus, social equality and human welfare (low level of power distance and low level of masculinity) • France: centralized decision making (emphasis on power & hierarchy); important role of government • Time needed for making decisions vs. implementing decisions.
Chapter 5: Culture and strategy
Strategy: the overall plan for deploying resources to establish a favorable position. • According to Schneider & Barsoux: strategy is the means for achieving corporate objectives. Tactic: a scheme for a specific maneuver. Types of strategies • Intended: design planning processes, rational choice • Emergent: process decision makers respond to multitude of external and internal forces Elements of success • Long-term, simple and agreed objectives • Profound understanding of the competitive environment (e.g. Porter) • Objective appraisal of resources The cultural roots of strategy • The rational/economic view o The environment and organization are objective realities that are similarly perceived and analyzed by intelligent managers 9
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Multiple interpretations to supposedly similar situations are likely Managers making strategic decisions follow a similar route “bounded rationality” Underlying assumptions that environments are intelligible and predictable; by taking action or doing, strategic objectives can be achieved instrumental view of the world Another view of strategy (dynamic/collective view) o Role of feelings o Questioning the nature of truth as determined by facts, figures and logic o Strategy as a collective and dynamic process go with the flow o Underlying assumptions regarding the relationship with nature (harmony), human nature (unlimited potential) and the nature of human relationships (collective prosperity and existence). Also: amount of control over the environment. o o o
General underlying assumptions • Relationship with nature (control) • Human beings (as capable) • Nature of truth and reality (facts and figures, logic) • Nature of relationships (role of hierarchy and the collective) These assumptions affect: • The source of information sought • Methods of interpreting this information • Who is involved in strategic management process controlling vs. adapting models Controlling model Centralized and formalized Information is quantitative and objective Top management makes decisions Underlying assumptions: o The environment can be known (is intelligible and predictable) o Information can be obtained to reduce environmental uncertainty o Truth is determined by facts and figures o Explicit and tangible targets (low-context communication) highly task and achievement oriented: achieving control • • • • Adapting model Decentralized and informal Information is gathered from personal sources, friends and colleagues and therefore is more qualitative and subjective • Decisions are expected to be reached through consensus • Underlying assumptions: o The environment cannot be readily known/controlled o Truth is determined by feelings or intuition strategy implementation is considered to hinge on the development of internal capabilities in order to be able to continuously improve: adapting • •
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Interaction effects • Strategic profiles: o Defender: centralized & formalized; strategic issues are interpreted as threats o Prospector: decentralized & informal; strategic issues are interpreted as opportunities Other spheres of cultural influence come from corporate culture and industry culture o Corporate: government regulations and resulting market conditions o Industry: driven by institutional environment
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Strategic implications of culture • The roles of headquarters and subsidiaries in formulating as well as implementing strategies need to be considered the more subsidiaries are involved in formulating strategies, the more readily they are implemented. By deciphering the underlying assumptions of uncertainty and control that influence the interpretation of strategic issues as threats or opportunities, the strategic actions or nonactions of competitors or partners might be better anticipated. Cultural dimensions and the institutional environment may explain the strategies for going international.
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Internationalization – the role of national culture • • • The greater the cultural distance, the less value for shareholders of acquiring firms is created. Different attitudes towards time and risk will influence foreign investment decisions. Investment decisions may also be based on relationships vs. tasks. 11
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The concept “cultural distance” suffers from several conceptual and methodological weaknesses: o Illusion of symmetry: the cultural distance is the same for the Dutch going to China as for the Chinese going to the Netherlands o Illusion of stability: there is no convergence over time or no potential learning curve o Illusion of linearity: there may be a lag time for performance effects o Illusion of causality: factors other than culture may create distance o Illusion of discordance: some factors, cultural or organizational, may be more important than others More control is needed when there is: o Greater specificity o Greater environmental uncertainty o Greater internal uncertainty o Greater free rider potential The interplay between international experience and learning needs to be better understood
Chapter 6: Culture and Human Resource Management
HRM: the policies, practices and systems that influence employees’ attitudes, behavior and performance The HRM menu Selection • Finding the right people for the company understanding how to access labor pools • Understanding educational systems is important • There may be difficulty accessing the most exclusive labor pools • Important to understand how a company has to recruit people
Socialization • The process whereby new members absorb the corporate culture and become acquainted with the values and behavior expected of them. • Nature of peer and hierarchical relationships • Use of high-context vs. low-context language • Ways of socialization: o Home visits/seminars o Social events o Company rituals o Artifacts (booklets, posters etc.)
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Training • For what purpose? o Generalist vs. specialist know-how o Relationships vs. task competencies o Can be seen in nature of job rotations (generalist) and extent to which training is conducted through in-house (specialist) or external seminars (generalist) • Who decides? o The firm or the individual o Amount of individualism/collectivism (responsibility for your own development) and hierarchy • How to learn and from whom? o German/Swiss: structured learning environments o Anglo-Saxon: open ended learning situations o Class discussions: tolerance for confrontation and uncertainty; concern for status differences o Business games: preference for doing o Computer based training
Performance appraisal • Setting goals, measuring outcomes and providing feedback • Instrumental view of organizations • Underlying assumptions: o Control over the environment: goals can be set and reached o Time can be managed: time frames o Reality is objective: goals can be measured o Power differences: dialogue about what has to be done between bosses & employees o Individualism/collectivism: responsibility in determining your own goals o Doing vs. being
Compensation and rewards • Who gets rewarded and how? • Should the reward be individual (equity) or collective (equality)? • Cultural assumptions of individualism, control over nature and achievement • Assumptions regarding uncertainty, risk-taking and control preference for variable rather than fixed compensation
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Preference for financial or non-financial incentives: importance of money, status or vacation time
Career development • Preferred paths for advancement and traits and behavior required for promotion • Assumptions regarding being vs. doing and beliefs about what managers are supposed to do or be • American managers: pragmatic, individualistic, achievement-oriented and instrumental world-view. • Favored career paths: cultural assumptions regarding importance of individual vs. loyalty to the group, doing vs. being and tolerance for uncertainty • Differences in patterns of career development due to: o Whether managers are developed internally or recruited externally o The stage at which those with high potential are identified (at entry or later on) o The type of work experiences acquired within or outside the company or industry (specialist vs. generalist) o Criteria for selection and promotion Internationalizing HRM • • • Having a sound understanding of the corporate strategy to make sure that the HRM policies are aligned. Having a thorough awareness of the cultural assumptions embedded in HR practices as well as those which prevail in local subsidiaries. Having the judgement to assess political concerns such that local resistance to HQ policies is really driven by cultural differences, or desire for local autonomy, or that HQ just wants to have its own way.
The impact of institutions • • • • Education/human capital: countries differ in their levels of education/HC low skills vs. high skills and low-wage levels vs. high-wage levels Political/legal system: Dictates requirements of HRM practices; outgrowth of the culture, reflecting societal norms Economic system: Socialist economies: little economic incentive to develop human capital; capitalist systems: higher tuition at state universities Amount of unions in society
Chapter 7: The “international” manager
• • As companies devise more sophisticated cross-border strategies, they increasingly search for executives who can leap borders in a single bound to do the implementing. However, international mobility does not necessarily enhance the ability to think internationally. 14
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The image of the global manager may be more myth than reality
What is an “international manager”? Myth or reality? • The global manager who spends periods of time working in different areas of the world is more a myth than a reality. However, the amount of international aspects in managerial jobs has grown and will likely keep on growing. Reasons for companies to be careful about international assignments: o Costs/Return on Investment: The cost of maintaining one employee on an international assignment is about four to five times the cost of an employee in their home operation. Reasons for employees to be careful about international assignments: o Career: does it really contribute to career goals? o Personal: can I cope with moving abroad and adapt to a culturally different environment? o Family: can my partner/children cope and adapt? The most often cited reason for failed assignments is the inability of expatriates and their families to adapt to the local culture.
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The process of cultural adjustment The process of adjusting to a foreign culture is said to follow a U-curve. • The honeymoon: optimism, curiosity, enthusiasm about the newness • The morning after/culture shock: irritation, frustration, confusion • Happily ever after: gradual adjustment to the new environment • • Adjustment evolves through acquiring greater knowledge of the local culture and language, having interaction with locals and being sociable and open. 3 dilemmas for expatriates: o How much of their own way should be relinquished and how much of the new ways are they willing to embrace? o Having a great deal of responsibility and power or depending on local management and employees to achieve objectives? o Managing allegiances between parent firm and local operation.
Competencies for managing internationally Managing differences abroad Interpersonal skills • Integrating in host culture • Satisfying needs for friendship and intimacy • Facilitates transfer of knowledge • Improves coordination and control • Tap into critical information and thus reducing stressful uncertainties • Being more people-oriented: building understanding and trust Linguistic ability • Developing a feel for what matters to others • Symbolic value • Unwillingness to speak the other’s language: unwarranted display of power 15
Motivation to work and live abroad • Cultural curiosity (genuine interst)
successful adaptation to another culture
Ability to tolerate and cope with uncertainty • Acknowledging that uncertainty and ambiguity exist • Acknowledging that multiple perspectives are possible • Remaining flexible go with the flow • Underlying assumption: control over the environment Patience and respect • Understand the local reasons for the way things happen
hard to be flexible
Cultural empathy • Focused listening and having a non-judgemental approach viewpoint Strong sense of self • Allows interaction without fear for losing one’s own identity • Enables the expatriate to be self-critical and open to feedback • Respond appropriately to failure • Reinforces the ability to handle stress
understanding the other’s
Sense of humor • Humor as a coping mechanism and for relationship building • Breaking the ice, establishing a link with others and dealing with sensitive issues • Potential for facilitating or destroying cross-cultural interactions Managing differences at home Understand interdependencies • Understanding interdependencies between different parts of the organization worldwide Respond to different cultures simultaneously • Contact with other cultures is not sequential, but simultaneous • Getting results from people who are very different from each other Be willing to share power • Head office is no longer all-powerful loose relations between home country and foreign nations • The pattern of cultural contact and the nature of relationships have changed Demonstrate cognitive complexity • Recognizing the need for differentiation ánd understanding the need for integration at multiple levels and sites within and outside the organization • Fundamental component of having a global mindset Adopting a cultural-general approach • Being aware of the cues signaling culture differences be they national, corporate or functional. 16
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Learning how to communicate more effectively
Rapidly learn and unlearn • Being constantly ready to take on new perspectives and try new approaches Having a global mindset • • Cognitive structures: maps and scripts managers use to navigate globally Cognitive processes: the way information is gathered and interpreted
Developing cultural competencies • • • Individual background: early experiences of other cultures, exchange programs etc. Work experience: e.g. working in mixed-nationality teams Challenges: o Exposure to other cultures is not a sufficient condition to develop the skills to manage across cultures o Company pressures by performance expectations and time constraints inhibit experimenting with new approaches that may locally be effective o Spending money and efforts on identifying people who can work internationally may end up in finding those who are actually unwilling to relocate
Personal strategies for managing across cultures • • • • Preparing for international assignments: cultural briefings, language training and suggested readings Selecting culturally responsive strategies Recognize that people belong to several cultures Cultural interactions are a dynamic process
Chapter 8: The “multicultural” team
Why multicultural teams? Greater numbers of temporary and permanent work groups designed to formulate or implement strategies. • Wider strategic reasons for creating multicultural teams: organizational integration, organizational learning and managerial development. • Using differences rather than trying to accept, absorb or ignore them. • Multicultural teams are assumed to be more difficult to manage than monocultural teams. Differences need to be understood and a team culture which builds upon these differences is the realistic and most promising “way out”. • Types of transnational teams • Business development/product launch • Regional headquarters • Functional • International joint venture 17
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Advantages • Creating richer quality of decisions • Creating the opportunity of greater creativity and innovations Disadvantages • More complex group dynamics • If not managed well, multicultural teams could perform worse than monocultural teams Strategies for managing multicultural teams: task strategies Creating a sense of purpose • Purpose has to be developed within the team motivation • People from different cultures have different assumptions about the reason for teams determines frequency of meetings/contacts, who should attend, conference calls/face to face, time needed for socializing • Purpose determines who needs to be involved o Task-orientation: people with appropriate knowledge & skills o Hierarchy: members assigned to teams because of their power and influence o Relationship-orientation: creating a sense of belonging and identification • Setting performance goals and objectives o Time frame: influence on dealing with strategies o Control over the environment: having control over achieving goals
Creating a sense of purpose • What is the team’s mission? How explicit should this be? • What are the team’s goals and objectives? To what extent can they be measured? • Who should be a member? • What are the team’s priorities? (Schedule? Budget? Quality?)
Task vs. relationship Being vs. doing Hierarchy Individual vs. collective High vs. low context Monochronic vs. polychronic
Structuring the task • Setting agendas o Is an agenda set at all or will the flow of the meeting take its own course? o Differences in desire to reduce uncertainty o Different notions of time: monochronic vs. polychronic: dealing with agenda items systematically or are agendas perceived as just guidelines? assumptions about acceptable behavior o High vs. low-context: degree to which things are spelled out/inferred
Structuring the task • To what extent should agenda be structured? • To what extent should the “rules of the game” be clearly spelled out? • What needs to be accomplished? By whom? • How should time be managed? How important are deadlines? What happens if deadlines are not met? • How will work be divided? Then integrated?
Uncertainty avoidance Monochronic vs. polychronic High vs. low context
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• What can be done together? Apart?
Assigning roles and responsibilities • Individualism vs. collectivism: “go it alone” approach vs. the group works interdepdently • Importance of taking individual initiative and personal responsibility: perceived control over the environment • Choice of team leader influenced by different cultural assumptions o Hierarchy: team leader has the final word on decisions o Egalitarian: team members may rotate chairing the meetings; decisions are made through consensus
Assigning roles and responsibilities • Who does what? Who is responsible for what? • Should a leader be assigned? Based on what criteria? Competence? Interpersonal skills? Hierarchical position? • What is the role of the leader? To take decisions? Facilitate discussions? Obtain resources? • Who needs to attend meetings and when?
Individual vs. collective Power & status Uncertainty & control Task vs. relationship
Reaching decisions • Majority rule, consensus or compromise • Assumptions of egalitarianism and individualism: voting • Consensus: preserving social harmony
Reaching decisions • How should decisions be made? By vote? By consensus? By compromise? • Who is expected to make the decision? Leader vs. team Individual vs. collective High vs. low context Hierarchy
Strategies for managing multicultural teams: process strategies Building a team • Demonstrate the need to cooperate in order to survive • Making explicit attempts to create team identity may run into resistance • Teambuilding to establish trust o US: being friendly and informal o Germany: proving competence & technical knowledge (task orientation) o Integrity & predictability (relationship orientation) o Will not meeting a deadline result in less trust? depends on assumptions regarding time and high vs. low context
Team building • How is trust developed? • How much time for social activities?
Task vs. relationship Monochronic vs. polychronic High vs. low context
Choosing how to communicate • Agree on working language can be used as power mechanism • Use of silence and interruptions • Use of technologies assumptions regarding trust and nature of truth 19
Choosing how to communicate • What is the working language? Who decides? • How to address imbalance in levels of fluency? • What type of communication technology can be used? • What is an effective presentation?
Power Individual vs. collective High vs. low context Monochronic vs. polychronic
Eliciting participation • Make sure that all members are heard: sensitivity & courage • Meaningful participation: everyone has helped move the team forward in their own way • Brainstorming, teleconferencing, write down ideas etc.
Eliciting participation • How can we ensure participation of all members? • To what extent are some members given more credibility than others? • Does it appear that the input of some members is being ignored? • Who listens to whom? • Who interrupts whom? Power Individual vs. collective
Resolving conflict • Avoidance: individualism, power unequally distributed • Competing: individualism, power equally distributive • Collaborating: collectivism, shared power, concern quality of relationships and mutual gain • Accommodating: relationship-oriented, perceived power is low, mutual obligations • Individualist countries: push/assert own ideas • Collectivist countries: look for mutual gain; maintaining relationships
Resolving conflict • How is conflict managed? Avoided? Confronted? • Who accommodates whom? Is collaboration sought? • To what extent do we compromise? Is negotiation seen as win/lose, lose/win or win/win? Task vs. relationship Power Individual vs. collective
Evaluating performance • US: direct intervention • Japan: preserving harmony • Britain: humor
Evaluating performance • How and when to evaluate performance? • Is evaluation a two-way process? • How direct can feedback be? High vs. low context Power Individual vs. collective
Virtual teams • Not sharing the same physical space • Developing a strategy to work effectively • Interaction patterns via technologies • Non-verbal cues 20
Chapter 9: The “global” organization
• Multinationals have to manage between the often conflicting demands to develop standardized products and policies (global integration) and to respond to local tastes and requirements (local responsiveness), as well as searching for ways to stimulate innovation and learning. Four types of relationships between headquarters and subsidiaries: o Ethnocentric: all policies and procedures come from the top (HQ decides what and how) o Polycentric: how policies and procedures are implemented is determined locally (HQ decides what, locals decide how) o Regiocentric: regional HQ serves as a buffer, negotiating between home country HQ and host country subsidiaries in a particular relation. o Geocentric: policies and procedures are developed with input from both HQ and subsidiaries, as well as across subsidiaries.
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Strategies for managing cultural differences Ignore cultural differences • Ethnocentric attitude • Assumption that business is business: managers, engineers or bankers are the same throughout the world • American firms are a good example uniform dress codes and standardized procedures • Focused on global integration and efficiency • Top-down communication Minimize cultural differences • Polycentric/regiocentric attitude • Creating a global corporate culture (the melting pot) o Management as cultural transfer agent o Assimilating differences in overriding corporate culture • Cultural segregation o Strategy formulation is centralized, strategy implementation is a local decision o Making use of standardized and sophisticated reporting procedures and systems • Creating a buffer o Regional headquarters help to improve coordination between national organizations and to seek out potential synergies between them o Regional headquarters provide a buffer between national units and head-office cultures Utilizing cultural differences • Geocentric attitude • Managers from different countries need the skills to operate across country boundaries and an infrastructure to make that happen. They also need to understand and even create interdependencies among units. • “the multicultural multinational” • Creating added value through innovation and learning 21
How global are “global companies”? • Four types of managers: o Transnationals: living abroad mostly on airplanes o Multinationals: extensive travelers but living in Italy o Open locals: receiving foreigners o Locals: little international contact Going global means more than operating in markets in many countries or having products that sell around the world. Global mind-set: the capacity to appreciate the values, beliefs and behaviors and business practices of individuals and organizations from a variety of regions and cultures. What is the representation of foreign managers in top management? Companies need to be able to spot the value-added that is embedded in each culture while focusing on shared interests both within and outside the organizational boundaries Truly multicultural organization: diversity is valued and utilized rather than just contained creating competitive advantage o Start at the top: Involvement of top management in selection and promotion, even mentoring, of other nationalities o Create opportunities for learning: being able to assess views of own and others’ culture, evaluate the effectiveness of interaction and develop strategies for dealing with differences o Check the pulse: employee surveys to check on attitudes and perceptions regarding how the company is dealing with diversity, the representation of foreign nationals at various levels, as well as career experiences o The global challenge: find ways to capitalize on differences and utilize cultural differences in order to gain competitive advantage
