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The Role of Culture

How Culture Affects Managerial Approaches

1. Centralized  Decision Making  VS. Decentralized Decision Making :

• In some societies, top managers make all important organizational decisions.
  
• In others, these decisions are diffused throughout the enterprise, and middle- and lower-level managers actively participate in, and make, key decisions.

2. Safety VS. Risk :

In some societies, organizational decision makers are risk averse and have great difficulty with conditions of uncertainty. In others, risk taking is encouraged, and decision making under uncertainty is common.

3. Individual Rewards VS. Group Rewards :

In some countries, personnel who do outstanding work are given individual rewards in the form of bonuses and commissions. In others, cultural norms require group rewards, and individual rewards are frowned on.

4. Informal Procedures VS. Formal Procedures :

In some societies, much is accomplished through informal means. In others, formal procedures are set forth and followed rigidly.

5. High Organizational Loyalty VS. Low Organizational Loyalty :

In some societies, people identify very strongly with their organization or employer. In others, people identify with their occupational group, such as engineer or mechanic.

6. Cooperation VS. Competition :

Some societies encourage cooperation between their people. Others encourage competition between their people.

7. Short-term Horizons VS. Long-term horizons :

Some cultures focus most heavily on short-term horizons, such as short-range goals of profit and efficiency. Others are more interested in long-range goals, such as market share and technologic development.

8. Stability VS. Innovation :

The culture of some countries encourages stability and resistance to change. The culture of others puts high value on innovation and change.

Values in Culture

n  Values

n  Basic convictions that people have :

n  right and wrong

n  good and bad

n  important and unimportant

n  Learned from the culture in which the individual is reared

n  Influence one’s behavior

n  Differences in cultural values may result in varying management practices

Values in Culture

1. There is a reasonably strong relationship between the level of success achieved by managers and their personal values.
2. Value patterns predict managerial success and could be used in selection and placement decisions.
3. Although there are country differences in the relationships between values and success, findings across four countries (U.S., Japan, Australia, India) are quite similar.
4. Values of more successful managers appear to favor :

n  Pragmatism, dynamic, achievement-oriented

n  Active role in interaction with others

1. Values of less successful managers tend toward :

n  Static and passive values

n  Relatively passive roles in interacting with others

Hofstede’s Cultural Dimensions

1. Power Distance

n  Extent to which less powerful members of institutions and organizations accept that power is distributed unequally :

n  High power distance countries: people blindly obey the orders of their superiors, centralized and tall organization structures

n  Low power distance countries: flatter and decentralized organization structures, smaller ratio of supervisors

2. Uncertainty Avoidance

n  Extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid such situations

n  High uncertainty avoidance countries: people have high need for security, strong belief in experts and their knowledge, structured organizational activities, more written rules, less risk taking by managers

n  Low uncertainty avoidance countries: people are more willing to  accept risks associated with the unknown, less structured organizational activities, fewer written rules, more risk taking by managers, higher employee turnover, more ambitious employees

3. Individualism/Collectivism

n  Individualism: Tendency of people to look after themselves and their immediate family only

n  Countries high in individualism: tend to be wealthier, support protestant work ethic, greater individual initiative, promotions based on market value

n  Collectivism: Tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty

n  Countries high in collectivism: tend to be poorer, less support for protestant work ethic, less individual initiative, promotions based on  seniority

4. Masculinity/Femininity

n  Masculinity: a culture in which the dominant social values are success, money and things

n  Countries high in masculinity: great importance on earnings, recognition, advancement, challenge, and wealth. High job stress.

n  Femininity: a culture in which the dominate social values are caring for others and the quality of life

n  Countries high in femininity: great importance on cooperation, friendly atmosphere, employment security, group decision making, and living environment. Low stress and more employee freedom.

Attitudinal Dimensions of Culture

n  Work value and attitude similarities

n  Smallest space analysis (SSA) yields clusters of countries similar to each other

1.    Anglo-American (U.S., U.K., Australia)

2.    Nordic (Norway, Finland, Denmark)

3.    South American (Venezuela, Mexico, Chile)

4.    Latin European (France, Belgium)

5.    Germanic (Germany, Austria, Switzerland)

n  Other researchers have found other clusters, depending on variables used

Trompenaars’ Cultural Dimensions

1. Universalism VS. Particularism :

n  Universalism: belief that ideas and practices can be applied everywhere in the world without modification

n  In countries with high universalism, focus is more on formal rules, business contracts are adhered to closely, people believe “a deal is a deal”

n  Includes Canada, U.S., Germany, U.K., Netherlands, France, Japan, Singapore, Thailand, and Hong Kong.

n      Particularism: belief that circumstances dictate how ideas and practices should be applied and something cannot be done the same everywhere

n  In countries with high particularism, legal contracts often modified, well-acquainted people often change the way in which deals are executed

n  Includes China and South Korea

2. Individualism VS. Communitarianism :

n  Individualism: people regard themselves as individuals

n  In countries high on individualism, people stress personal and individual matters, and are more likely to make negotiated decisions on the spot by a representative, achieve things alone and assume great personal responsibility

n  Includes Canada, Thailand, U.K., U.S., Netherlands, France, Japan, China, Singapore, and Hong Kong

n       Communitarianism: people regard themselves as part of a group

n  In countries high on communitarianism, people value group-related issues, refer decisions to committees, achieve things in groups and jointly assume responsibility

n  Includes Malaysia and Korea

3.Neutral VS. Emotional :

n  Neutral: culture in which emotions are held in :

n  In high neutral culture countries, people try not to show their feelings, act stoically and maintain their composure

n  Includes Japan and the U.K.

n  Emotional: culture in which emotions are expressed openly and naturally

n  In high emotional culture countries, people smile a great deal, talk loudly when excited and greet each other with enthusiasm

n  Includes Mexico, the Netherlands and Switzerland

4. Specific VS. Diffuse :

n  Specific culture: individuals have a large public space shared with others and a small private space they guard closely and share only with close friends and associates

n  In high specific cultures, people are more open , and there is a strong separation of work and private life

n  Includes Austria, U.K., U.S. and Switzerland

n      Diffuse culture: public and private space are similar in size, individuals guard public space carefully because it is shared with private space

n  In high diffuse cultures, people often appear to be indirect and introverted, and work and private life often are closely linked

n  Includes Venezuela, China, and Spain

5. Achievement VS. Ascription :

n  Achievement culture: status is accorded based on how well people perform their functions

n  Includes Austria, U.S., Switzerland and the U.K.

n  Ascription culture: status is based on who or what a person is

n  Includes Venezuela, Indonesia, and China

6. Time :

n  Sequential approach

n  People do only one activity at a time, keep appointments strictly, prefer to follow plans as laid out (United States)

n  Synchronous approach

n  People tend to multi-task, view appointments as approximate, schedules are seen as subordinate to relationships (France, and Mexico)

n  Present oriented/future oriented

n  Future is more important (U.S., Italy, and Germany )

n  Present is more important (Venezuela, Indonesia, and Spain)

n  All three time periods equally important (France and Belgium)

7. The Environment :

n  Inner-directed: people believe in controlling outcomes

n  Includes U.S., Switzerland, Australia, Belgium, Indonesia, Hong Kong, Greece, Singapore, and Japan

n  Outer-directed: people believe on letting things take their own course

n  Includes China and many other Asian countries

GLOBE Project

n  Multi-country study and evaluation of cultural attributes and leadership behavior

n  Based on beliefs that :

n  Certain attributes that distinguish one culture from others can be used to predict the most suitable, effective and acceptable organizational and leader practices within that culture

n  Societal culture has direct impact on organizational culture

n  Leader acceptance stems from tying leader attributes and behaviors to subordinate norms