Cross Cultural Management summary
Chapter 7
Organisational local of global cross cultural interaction: what are the stages of development
organisations go through and how does this organisational structure affect cross cultural
interaction/cultural diversity?
Adler with Gundersen (2008): investigated the impact of national culture and cultural diversity on
organisations and the stages organisations go through before they can call themselves global. 4 kinds
of organisations, each of which isn’t only an independent structure, but also one of the phases of
development when going global are:
1. Domestic structure: firms with this structure offer products/services exclusively to domestic
market. If they sell products abroad, its because foreign customers want to buy their
products. They have ethnocentric perspective without sensitivity towards cultural
differences. Worldwide cultural diversity hasn’t affected domestic firms internal
organisational culture
2. Multidomestic structure: organisation is presented as set of sub-units in several countries
which operate autonomously. Each of these firms must take into account particularities of
the local market in which it is operating. Sensitivity towards cultural differences is therefore
important when implementation of corporate strategy is considered. Cultural diversity
strongly affects relationships external to the organisation given that it has clients and
employees in other countries
3. Multinational structure: due to geographical spread of this structure, diversity is inherent to
the organisation concerned. Unlike multidomestic firm, this structure has internal
organisation whose culture is affected by cultural diversity present. That’s why these
companies attach great importance to managing multinational diversity within the firm
rather than managing cultural differences external to the firm
4. The transnational or global structure: final type of structure, gives enterprises their global
status. Differs from the others as it generates its own evolution without having to rely on
forces outside the enterprise. Heterogeneity is indispensable. The global strategies of human
resources become essential and diversity allows mutually beneficial relations to be created
How does it affect centralizing in structure?
What are the models used to describe corporate culture?
Deal and Kennedy: among the first to examine corporate culture. The business environment has an
influence on the culture of the company. Therefore, a classification of types of cultures on basis firms
and their business environment:
- The tough guy, macho culture: this culture takes a lot of risks and quickly finds out if its
actions have been successful (quick feedback) , e.g. police force, hospital, construction,
cosmetics industries, management consulting, whole entertainment industry. Find a
mountain and climb it.
- Work hard/play hard culture: fun and action culture with a tendency to pursue low risk
activities that give quick feedback. Found in sales department of company or in factory.
Feedback gained rapidly, everyone knows if work has been carried out according to the rules.
Find a need and fill it.
- Bet-your-company culture: favours high risk, but in environment where feedback is slow. A
lot of time passes before employees see the benefit of decisions taken by the company. Risk
of company going bankrupt is considerable. That’s why relations within the company are
such that discussions are encouraged to make sure the right decision is taken
- The process culture: little feedback within this culture and activities are low risk, banks,
insurance companies, financial departments, highly regulated industries as pharmaceutical
, companies. Due to lack of feedback employees are forced not to worry about what they are
doing but how they are doing it.
Trompenaars and Woolliams and organisational relationships: describe corporate culture as the
driver of the organisation. Management of culture is now about creating a corporate culture in which
people will work together to achieve the organisation’s goals, reconciling dillemas that originate from
issues of corporate culture. Just as in society an organisation is composed of individuals with
different personalities who form and share a culture.
- The incubator: like a team without a leader. Main characteristic: person-oriented, focused on
self-realisation, commitment to oneself and professional recognition. People oriented,
egalitarian
- The guided missile: low degree of centralisation, high degree of formalisation. Task oriented
with MBO approach and focus on power of knowledge/expertise, commitment to tasks and
pay for performance, task oriented, egalitarian
- The family culture: high degree of centralisation and low degree of formalisation, power
oriented with stress of personal relationships (affinity/trust) and entrepreneurial character.
People oriented, hierarchical
- The Eiffel tower: high degree of formalisation and centralisation, role oriented with power
attached to position of role. Formality reflected in importance given to job descriptions and
evaluations, rules and procedures, order and predictability. Task oriented, hierarchical
What is the problem in using models like this?
It leaves out other factors: if you define a corporate culture of a company it can be wrong to
generalise e.g. even though they are both banks, a Canadian bank can be very different for an
American bank. Furthermore, culture evolves as it behaves every group situation in a unique way:
there’s no way to generalise it.
What is the paradox in using models like Trompenaars and Deal & Kennedy’s for
stereotyping/describing corporate culture?
The culture of each company exists in its own right and being the result of the company’s history,
belongs to it alone. Unlike a production method, a corporate culture cannot be copied. It is unique
and is a way in which an organisation can distinguish itself from its competitors. Therefore, it is hard
to make assumptions about corporate cultures based on these models.
Chapter 8
What are the X and Y theory about?
Theory X: based on a pessimistic assumption that people have an inherent dislike of work and will do
a lot to avoid it. They lack ambition, avoid responsibility and seek security in the workplace, lack
imagination, creativity and initiative.
Theory X manager: is results-driven, demands rather than asks, has little interest in human issues and
shows little concern for the moral of the workforce. Doesn’t listen to suggestions for improvement,
sees criticism as threatening, holds responsibility but is the first to hold subordinates accountable for
failures.
Theory Y: based on an optimistic approach and assumes that people actually like working under
suitable conditions; they are self-starters, willing to accept responsibility, are creative and
imaginative.
, Theory Y manager: believes people, under the right conditions want to learn to accept and to seek
responsibility. Wants employees to participate in decision-making and problem-solving – people’s
creativity can be used to solve problems and further the organisation’s success.
Drawback of Theory X-Y: gave little consideration to the influence of different situations in which a
leader may operate and how these affect the effectiveness of the leader. Theories were developed to
establish the factors determining an appropriate match between leadership style and demands of
the situation. The implication of this approach is that there is no universal answer to makes an
effective leader.
Therefore, the focus of the research in North America shifted from the person to the context in
which leadership takes places.
What is Fielder’s contingency theory about?
Fielder’s contingency theory: considers how performance of the workers in an organisation is the
result of the interaction of two factors: leadership style and situational favourableness. leadership
effectiveness is the result of interaction between the style of the leader and the characteristics of the
environment in which the leader works.
This environment is characterised by three factors:
- Leader-member relationship: the degree of confidence, trust and respect
- Task structure: the extent to which it is necessary to spell out the goals, procedure and
guidelines to the workers
- Position power: the extent to which the leader or the group holds the power. The leader’s
power may be boosted by the expertise shown and the authority to reward or punish.
What is the value of Fielder’s contingency theory in comparison with X-Y?
It considers how the performance of the workers in the organisation is the result of the interaction of
two factors: leadership style and situational favourableness. According to Fiedler, leadership
effectiveness is dependent on the result of interaction between the style of the leader and the
characteristics of the environment in which the leader works. This situational favourableness, the
influence of different situations in which a leader may operate, was missing in the X-Y theory.
How is Fielder’s contingency theory problematic from a cultural viewpoint?/what’s the problem
with the model?
One contingency not taken account of in Fielder’s theory is culture: leaders may not be able to
exercise all the variables described because of cultural constraints. Instead of being in a position
to influence the workforce they may be forced to alter their own leadership behaviour to conform to
the cultural realities they face. Managers working in an international environment may need to take
account of cultural differences and adapt their style of leadership.
What is the Z-theory about?
Z-theory: reflects the Japanese concept of wa. This is the notion of harmony, reflected in the
considerable degree of collaborative behaviour and consensus-building within an organisation.
Assumes: employees are disciplined, have a strong moral obligation to work hard and want to
establish close, co-operative working relations with their colleagues and with those for whom they
are working. They can be trusted to work hard as long as management can be trusted to give them
maximum support and to show concern for their well-being.
Management’s job: ensure employees increase their knowledge of the company through training and
job rotation.
