International Management Studies Essay
INTERNATIONAL DIMENSIONS OFORGANIZATIONAL BEHAVIOR FIFTH EDITION NANCY J. ADLER McGill University with ALLISON GUNDERSEN Case Western Reserve University International Dimensions of Organizational Behavior, Fifth Editionby Nancy J. Adler with Allison Gundersen COPYRIGHT © 2008, 2002 Thomson South-Western, a part of The Thomson Corporation.
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—Nancy J. Adler To my nieces, Stephanie and Melissa Merakis, who give me hope and inspiration for the future. —Allison Gundersen v Preface The world of organizations is no longer defined by national boundaries.
International Dimensions of Organizational Behavior breaks down the con- ceptual, theoretical, and practical boundaries that limit our ability to understand and work with people in countries and cultures around the world. Prior to the 21 stcentury, a disproportionate amount of the pub- lished material on management came from the United States. American managers and American-trained researchers observed the behavior of people in U.S.-based organizations. From their observations and research, they developed models and theories to explain the behavior of people and organizations. The problem was in their implicit assump- tion: most scholars assumed that what was true for Americans working in the United States was also true for people from other countries work- ing worldwide. Both managers and researchers assumed that Americans’ work behavior was universal. They were wrong. International Dimensions of Organizational Behavior challenges us to transcend our parochialism—no matter which country we grew up in—and to see the world from a global perspective. Today, managers no longer have the luxury of reducing global com- plexity to the simplicity of assumed universality; they no longer have the luxury of assuming that there is only one best way to manage.
Luckily, we have learned that global complexity is neither unpredictable nor random. Variations across cultures and their impact on organiza- tions follow systematic, predictable patterns. Starting with a core of tra- ditional, primarily U.S.-based understandings of the behavior of people in organizations, International Dimensions becomes a guide for modifying our attitudes, thinking patterns, and behavior. Far from ignoring the historical body of managerial knowledge, International Dimensions expands our understanding of people’s behavior at work to include the diversity and complexity of today’s global environment. International Dimensions of Organizational Behavior is divided into three parts. Part 1, “The Impact of Culture on Organizations,” describes the ways in which cultures vary, how that variance systematically affects organizations, and how people can recognize, manage, and effectively use cultural variance within their own work environments. Chapter 1 provides a broad context for understanding the global nature of today’s business environment. Chapter 2 focuses on the nature of cultural dif- ferences worldwide and how they impact organizations. Chapter 3 pro- vides a framework for understanding how to effectively communicate across cultures. Part 2, “Leveraging Cultural Diversity,” presents an inte- grated approach to managing in multicultural work environments.
Chapter 4 investigates cross-cultural problem solving and organization- al development; Chapter 5 presents the dynamics of multicultural teams; Chapter 6 reviews approaches to global leadership; Chapter 7 focuses on the best approaches for inspiring and motivating people from around the world; Chapter 8 reviews decision making from a global perspective; and Chapter 9 summarizes global approaches to negotiating and resolving conflict.Part 3, “Managing Global Managers,” presents a series of issues that are unique to managing people in a global environment. It addresses the human resource management dilemmas involved in managing one’s life and career while moving across international borders. Chapter 10 describes the cross-cultural entry and re-entry transitions from the employee’s perspective and addresses such questions as: What is culture shock? How does one adjust to a new culture? How can employees who have worked abroad successfully navigate re-entry back into their home countries and home organizations? Chapter 11 also presents global transition issues, but from the perspective of the spouse. Chapter 12 introduces the challenges of managing a global career. How do the routes to the top of major companies vary from one country to another?
What do managers see as the most important benefits and drawbacks of pursuing global careers? Given its focus on global managers, this section goes far beyond the scope of domestically oriented books on both management and organizational behavior. International Dimensions of Organizational Behavior is used by executives, managers, and college students in a number of ways. First, it is fre- quently used as a basis for cross-cultural management seminars in which each chapter of the book forms the core of a course module.
When used in this way, the book is often supplemented with current readings that provide a more in-depth look at specific areas of the world, as well as with news articles on contemporary world business events. After being introduced to each module with a chapter from International Dimensions , seminar participants often expand on the mate- rial in the book, based on their current interests and experience, by looking at how it applies, for instance, to e-commerce in Eastern Europe or to China’s and India’s rapidly expanding economies.
Alternatively, the book is used as a supplement to core organizational behavior courses. In this case, professors first use their standard intro- duction to the study of people’s behavior in organizations. Using Chapters 1 and 2, they then introduce the international dimensions of organizational behavior. Following this introduction, they pair a chap- ter from International Dimensions of Organizational Behavior with each of the viPreface modules of their standard course. They pair Chapter 3, for example, with their perception and/or communications module; Chapter 4 with their problem solving and/or organizational development and change module; Chapter 5 with their module on group dynamics and team building; Chapters 6, 7, and 8 with their discussions of leadership, moti- vation, and decision making; and Chapter 9 with material they present on conflict management and negotiation. In addition, in combination with a module on human resource management or managing careers, or as a completely independent module, professors present Part 3 of International Dimensions,which deals with issues related to managing global managers. Participants complete the course with an in-depth understanding of organizational behavior issues from a global, rather than simply a domestic, perspective. As a third alternative, International Dimensions of Organizational Behavior is sometimes used as a self-contained part of a more traditional organi- zational behavior, management, human resource management, or international business course. Professors selecting this option often present their more domestically oriented material first, and then add a section on international dimensions. As the economy becomes more globally integrated, this third option is preferred less frequently. Because a substantial amount of the traditional management litera- ture is based on the behavior of Americans working in the United States, and many practicing managers as well as students of management are familiar with U.S. patterns, International Dimensions often uses the United States as a reference point and as a point of comparison. Readers in the United States will recognize the familiar ways in which organizational behavior is usually described and be able to add a more global perspec- tive to their knowledge and skills. Readers from all countries will gain a better understanding of their own culture’s practices and ways of con- ducting business, both relative to traditional U.S.-based descriptions and, more importantly, relative to a wide variety of countries and cul- tures worldwide. No country’s system or perspective is any better or worse—any more or less effective—than any other country’s; rather, each is distinct and therefore must not be understood as a replica of any other nation. Cross-cultural management (i.e., studying the international dimen- sions of people’s behavior in organizations) is a relatively new field com- pared to the traditional study of management. International Dimensions of Organizational Behavior integrates the best of what is known in the field as of the first decade of the 21 stcentury. Our knowledge will continue to grow far beyond today’s understandings. Even though the limits of our understandings at times restrict us, they also define the expanding boundaries and excitement of an important and rapidly growing field Preface vii of knowledge. Far from leaving with a sense of knowing all there is to know, it is hoped that readers will finish the book with a sophisticated awareness of the world beyond their own national borders, an under- standing of the limits of their own knowledge, and a set of frame- works and questions to guide their managerial decisions and future inquiry.
ACKNOWLEDGMENTS The process of understanding the human dynamics in global manage- ment has brought together some of the best thinking and insights from executives, consultants, managers, and scholars worldwide. The process is evolving. What we know today is so much more than what we under- stood yesterday, and yet so much less than what we will need for tomor- row. The excitement and passion in the search is predicated on our need to understand ourselves in a world in which no part of humanity is very far away, a world in which our success as well as our survival depends on our understanding and respect for each other.We would like to thank the many people who have contributed to this book, each from his or her unique perspective and expertise. The quality of this book is shared by all; the errors and limitations are ours alone. Our thanks to: Liselotte Adler (USA), Arshad Ahmad (Pakistan), Nakiye Boyacigiller (Turkey), Jill deVillafranca (Canada), Joseph J.
DiStefano (Switzerland), Angela Dowson (Canada), Paul Evans (England), John Graham (USA), Jon Hartwick (Canada), Mary Hess (USA), Maryann Jelinek (USA), André Laurent (France), Phyllis Lefohn (USA), Robert T. Moran (USA), Eileen Newmark (USA), Pri Notowidigdo (Indonesia), Roger Putzel (USA), Vijit Ramchandani (India), Indrei Ratiu (Britain/Romania), George Renwick (USA), Stephen Rhinesmith (USA), David Ricks (Austria), Karlene Roberts (USA), Anita Salustro (USA), Frances Westley (Canada), and Rola Zoayter (Lebanon). In addition, we would like to thank the Organizational Behavior departments at Case Western Reserve and McGill Universities for their support, and the faculty and staff of the Summer Institute for Intercultural Communication for their commit- ment to the field and research assistance. A very special thank you goes to Troy Anderson at McGill University for his always extremely helpful research, insights, and editing assistance, and to Darlene Fowler for her patient and conscientious organizing and typing of each new revision until the chapters you see here became the fifth edition. The current fifth edition of the book International Dimensions of Organizational Behavior would not be possible without the viiiPreface Prefaceix work contributed by many dedicated colleagues on prior editions, including Louise Dubreil, without whose help, encouragement, and insight, the first edition of this book would have never become a real- ity; Robine Andrau for her excellent editing of the second and third editions; and John Szilagyi for his professionalism and enthusiasm in managing the fourth edition and the initiation of the current fifth edition. This page intentionally left blank About the Authors NANCY J. ADLER Nancy J. Adler is a Professor of Organizational Behavior and Inter- national Management at McGill University’s Faculty of Management in Montreal, Canada. She received her B.A. in economics, M.B.A. and Ph.D. in management from the University of California at Los Angeles (UCLA).Dr. Adler conducts research and consults on global leadership, cross- cultural management, women as global managers and leaders, and the arts and leadership. She has authored over 100 articles, produced the film A Portable Life , and, in addition to International Dimensions of Organizational Behavior , published the books Women in Management Worldwide, Competitive Fronti ers: Women Managers in a Global Economy , and From Boston to Beijing: Managing with a Worldview. Dr. Adler consults to private corporations and government organi- zations on projects in Asia, Africa, Europe, North and South America, and the Middle East. She has taught Chinese executives in the People’s Republic of China, held the Citicorp Visiting Doctoral Professorship at the University of Hong Kong, and taught executive seminars world- wide, including at INSEAD in France, Oxford University in England, and Bocconi University in Italy. She received McGill University’s first Distinguished Teaching Award in Management and is one of only a few professors to have received it a second time. Honoring her as one of Canada’s preeminent university professors, she was selected as a 3M Teaching Fellow.
Dr. Adler has served on the Board of Governors of the American Society for Training and Development (ASTD); the Canadian Social Science Advisory Committee to UNESCO; the Strategic Grants Committee of the Social Sciences and Humanities Research Council; the Executive Committees of the Pacific Asian Consortium for International Business, Education and Research; the International Personnel Association; and the Society for Human Resource Management’s International Institute, as well as having held leadership positions in the Academy of International Business (AIB); the Society for Intercultural Education, Training, and Research (SIETAR); and the Academy of Management. Dr. Adler received ASTD’s International Leadership Award, SIETAR’s Outstanding Senior Interculturalist Award, the YWCA’s Femme de Mérite (Woman of Distinction) Award, xi xiiAbout the Authors and the Sage Award for scholarly contributions to management. She was elected to both the Fellows of the Academy of International Business and the Academy of Management Fellows, as well as being inducted into the Royal Society of Canada. In addition to her role as a global manager professor and consultant, Dr. Adler is an artist, working primarily in water color and Asian ink traditions. ALLISON GUNDERSEN Allison Gundersen received her A.B. from Cornell University and her M.A. in Intercultural Relations from Lesley University. She has extensive experience managing and consulting in information technology and investment banking in Asia and North America, having been based in both Tokyo and New York City. Her global management work has focused on diverse teams, global responsibilities, and expatriation.
Allison is currently conducting research on global leadership, interna- tional management, and cross-cultural teams as part of the Department of Organizational Behavior at Case Western Reserve University’s Weatherhead School of Management (repeatedly rated as the number one Organizational Behavior department in the world by the Financial Times ), where she is pursuing her doctoral degree. xiii Contents PART 1 The Impact of Culture on Organizations . . . . . . . . . . . . . . . . . . . . .3 CHAPTER 1 Culture and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Global Strategy and Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Going Global: Phases of Development . . . . . . . . . . . . . . . . . . . 9 Cross-Cultural Management . . . . . . . . . . . . . . . . . . . . . . . . . . 13 What Is Culture? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ 18 How Do Cultures Vary? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . . 35 CHAPTER 2 How Cultural Differences Affect Organizations. . . . . . . . 44 Work Behavior Varies Across Cultures . . . . . . . . . . . . . . . . . . 44 Are Organizations Becoming More Similar?. . . . . . . . . . . . . . 62 Organizational Culture and National Culture . . . . . . . . . . . . . 63 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . . 65 CHAPTER 3 Communicating Across Cultures. . . . . . . . . . . . . . . . . . . . . 69 Communicating Cross-Culturally . . . . . . . . . . . . . . . . . . . . . . 70 Cross-Cultural Misperception . . . . . . . . . . . . . . . . . . . . . . . . . 73 Cross-Cultural Misinterpretation . . . . . . . . . . . . . . . . . . . . . . 75 Cross-Cultural Misevaluation . . . . . . . . . . . . . . . . . . . . . . . . . 86 Communication: Getting Their Meaning, Not Just Their Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . . 92 PART 2 Leveraging Cultural Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 CHAPTER 4 Creating Cultural Synergy. . . . . . . . . . . . . . . . . . . . . . . . . . 99 Cultural Invisibility: Strategies for Recognizing Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 xivContents Cultural Synergy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 121 CHAPTER 5 Managing Multicultural Teams. . . . . . . . . . . . . . . . . . . . . 126 Managing a Multicultural Workforce . . . . . . . . . . . . . . . . . . 126 Domestic Multiculturalism . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Teams: The Organization in Microcosm . . . . . . . . . . . . . . . . 131 Types of Diversity in Teams. . . . . . . . . . . . . . . . . . . . . . . . . . 132 Cultural Diversity’s Impact on Teams . . . . . . . . . . . . . . . . . . 134 Conditions for High-Performing Multicultural Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Managing Culturally Diverse Teams . . . . . . . . . . . . . . . . . . . 144 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 147 CHAPTER 6 Leading Globally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Global Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Leadership Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Leadership Theories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 Cultural Contingency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Global Leadership Competencies . . . . . . . . . . . . . . . . . . . . . 169 Global Leadership: Creating a Positive Future . . . . . . . . . . . 172 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 174 CHAPTER 7 Motivating People From Around the World:
Inspiring People to Contribute. . . . . . . . . . . . . . . . . . . . . 184 Hierarchies of Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Three Motives: Achievement, Power, and Affiliation . . . . . . 186 The Two-Factor Motivation Theory . . . . . . . . . . . . . . . . . . . 187 Expectancy Theories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Cultural Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Beyond Motivation: Inspiration . . . . . . . . . . . . . . . . . . . . . . 192 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 199 CHAPTER 8 Multinational Decision Making. . . . . . . . . . . . . . . . . . . . . 207 Problem Recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Information Search . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Constructing Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Contentsxv Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . . . . 212 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Ethical Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 219 CHAPTER 9 Negotiating Globally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 Negotiating Globally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 Negotiating Successfully: The People, the Situation, and the Process . . . . . . . . . . . . . . . . . . . . . . . . 229 Negotiation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 Negotiation Tactics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Negotiating Across Cultures: Ethical Challenges . . . . . . . . . 258 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 261 PART 3 Managing Global Managers . . . . . . . . . . . . . . . . . . . . . . .271 CHAPTER 10 Managing Cross-Cultural Transitions:
Moving Abroad and Coming Back Home . . . . . . . . . . . . 273 Entering a New Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Managing Expatriates Effectively, Equitably, and Ethically . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . 282 Coming Home: Re-entering One’s Own Culture . . . . . . . . . . 284 Professional Re-entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 Underutilized Global Managers. . . . . . . . . . . . . . . . . . . . . . . 296 Coaching Women for Global Managerial Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 304 CHAPTER 11 A Portable Life: The Expatriate Spouse. . . . . . . . . . . . . . 314 Single-Career Couples: The Traditional Expatriate’s Wife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Living Globally: Dual-Career Couples . . . . . . . . . . . . . . . . . . 330 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 340 CHAPTER 12 Global Careers: Succeeding in the 21st Century. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 What It Takes to Reach the Top . . . . . . . . . . . . . . . . . . . . . . . 346 Is the Traditional Expatriate Manager Extinct? . . . . . . . . . . 348 Today’s Global Careers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 Global Managers and Leaders: No Longer Men Alone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 358 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . 370 Epilogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . . . . . . . . . . . . 381 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . . . . . . . . . . . . . . . . . 383 Painting on Book Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \ . . 397 xviContents INTERNATIONAL DIMENSIONS OFORGANIZATIONAL BEHAVIOR PART 1 The Impact of Culture on Organizations CHAPTER 1 Culture and Management CHAPTER 2 How Cultural Differences Affect Organizations CHAPTER 3 Communicating Across Cultures Chapter 1 Culture and Management Verité en-deçà des Pyrénées, erreur au-delà. (“There are truths on this side of the Pyrenees which are falsehoods on the other.”) 1 —Blaise Pascal Capital raised in London in the Eurodollar market by a Belgium- based corporation may finance the acquisition of machinery by a subsidiary located in Australia. A management team from French Renault may take over an American-built automotive complex in the Argentine. Clothing for dolls, sewn in Korea on Japanese- supplied sewing machines according to U.S. specifications, may be shipped to Northern Mexico for assembly with other components into dolls being manufactured by a U.S. firm for sale in New York and London during the Christmas season. A California-manufac- tured [plane] . . . is powered by British ...engines, while a com- peting [aircraft ]...flies on Canadian wing assemblies. A Frenchman is appointed president of [a] U.S. domiciled ...corpo- ration, while an American establishes ...a Swiss-based interna- tional mutual fund (28:1–2). M anaging the global enterprise and modern business management have become synonymous. The terms international, multinational, transna- tional, andglobal can no longer be relegated to a subset of organizations or to a division within the organization. Definitions of success now tran- scend national boundaries. In fact, the very concept of domestic business may have become anachronistic. Today “the modern business enterprise has no place to hide. It has no place to go but everywhere” (56:xiii) .
Executives no longer question the increasing importance of global business. As indicated in the 21st Century Report (38) , more than two- thirds of the world’s CEOs view foreign competition as a key factor in their firms’ business success. S imilarly, two-thirds of the world’s CEOs 5 expect to generate employment and revenues increasingly from outside their firms’ home countries (38:30,31) . These same executives believe that effectively managing human resources is critical to global success (38:2) .
The post–World War II years saw a major expansion of world trade.
From 1948 through 1972 world exports grew from $51 billion to $415 billion, representing a sevenfold increase in monetary terms and a four- fold increase in volume (22:23) .2By 1980 international trade volume exceeded $1 trillion as compared with $800 billion in 1975 (48) . In the 1990s, world exports grew from $4.3 trillion in 1990 to $7.1 trillion in 1999, an increase of 65 percent (27) , and by 2005 they had grown to $12.6 trillion, an increase of an additional 77 percent (47) . By the 1990s, Coca- Cola, for example, earned higher profits selling soda to the Japanese than to Americans (82:5) . By 2006, Coca-Cola produced nearly 400 prod- ucts in over 200 countries, with more than 70 percent of its income coming from outside the United States (21) . Mexicans, not Americans, lead the world in the consumption of Coca Cola’s beverages, consum- ing, on average, 533 8-oz. beverages per year (21) . Today’s world trade dwarfs all prior statistics.
By the mid-1980s, the U.S. Commerce Department estimated that some 70 percent of U.S. firms faced “significant foreign competition” in their domestic markets, up from only 25 percent a decade earlier (67:11) . By the end of the 1980s, the chairman of the Foreign Trade Council estimated the figure to be 80 percent. Companies are increas- ingly looking outside their domestic markets for revenue. In a study of U.S. companies with revenues over $1 billion, Accenture found that, on average, executives expect sales revenue generated abroad to reach 42 percent of their overall earnings by 2009, compared with 26 percent in 2002 (14) . Ninety-seven “percent report that their organization is upgrading its global operations” (14) . Today, in the early years of the twenty-first century, global competition is serious, pervasive, and here to stay (49) .
What does the future portend? According to The Economist,between 1995 and 2020, “the world will see the biggest shift in economic strength in more than a century” (33:3) . Emerging economic giants will dwarf developed industrial economies, and “within a generation, China will overtake . . . [the United States] as the world’s biggest economy” (33:4) .
Since 2000, the average annual percentage change in total output in devel- oping countries was more than twice that of advanced economies (9.5% versus only 4.1% [47] ). Moreover, many of the top 15 economic perform- ers this century will be from today’s rapidly developing economies, with countries such as Thailand and Taiwan overtaking Britain (33:4) . In fact, the five fastest growing economies from 1990-2004 were Albania, Bosnia and Herzegovina, China, Ireland, and Vietnam (96:1) . The developing 6 The Impact of Culture on Organizations world’s share of world exports of manufactured goods jumped more than 400 percent in the last quarter of the twentieth century (33:4) . Developing countries are playing a greater role in the global marketplace, with low- and middle-income economies accounting for 28.5 percent of world trade, up from 22.3 percent in 1999 (96:3) .
Will today’s economically developed countries continue to prosper or will they lose out to the gains forecast for developing economies? 3Experts differ in their predictions. Pessimists fr om economically developedcoun- tries argue that with increasing access to advanced technology, jobs are shifting from workers in rich countries to cheaper, educated labor in economically developing countries. They see free trade with developing countries as a recipe for increasing unemployment in previously eco- nomically developed countries, huge wage inequalities, and a massive migration of firms to countries with high skills and low wages. In a dra- matic role reversal, economically developing countries that historically were considered victims of multinational exploitation are viewed as vil- lains, stealing capital and jobs and, ironically, creating inequities by destroying the wealth of developed economies. On the surface this pessimistic scenario appears likely, especially when comparing the hourly wages of production workers. Midway through the first decade of the twenty-first century, it cost $33 an hour to employ a production worker in Germany, $23 an hour in the United States, and $22 an hour in Japan; but only $5.50 in Hong Kong, $2.50 in Mexico, and 50 cents in Sri Lanka (94) . According to the president of the World Economic Forum, it has become possible for countries to simulta- neously have high productivity, advanced technology, and low wages (81) .
A major French consumer electronics group, for example, employs three times as many highly skilled workers in Asia as it does in France.
Similarly, the Italian sportswear maker Fila produces only 10 percent of its sportswear in Italy; it subcontracts the rest in lower-wage Asian economies. Thomas Friedman, author and New York Timeseditorial columnist, accurately depicts the complex reality of today’s global busi- ness environment by tracing the supply chain for his Dell notebook from his telephone order through delivery to his home in Maryland. It “involved about four hundred companies in North America, Europe, and primarily Asia, but with 30 key players”; even with a delay, this just-in-time process took only 17 days (32:515-520) .
Optimists from economically developed countries, however, predict a different scenario. According to optimists, advanced economies, far from losing out to the growing prosperity of economically developing countries, are benefiting from it. Billions of new consumers in the devel- oping world are markedly increasing demand for exports from the advanced economies. In just the past decade, exports from high-income Culture and Management 7 to low- and middle-income countries have already more than doubled.
India’s middle class, estimated to grow to over 350 million by 2010, is an example of growing markets, “clamoring for the latest in flavored tooth- paste and flat-panel TVs” (85) . In addition, the optimists contend that both advanced and developing economies benefit from increased com- petition. Greater economies of scale and better allocation of resources resulting from increased competition and financial diversification are improving expected rates of return for all major players. The proportion of foreign direct investment into developing countries increased from 12 to 41 percent of the total over the 1990s (97) . In absolute terms, the flow of foreign direct investment into economically developing countries is even more impressive, increasing nearly sevenfold from $36 billion to $233 billion from 1990 to 2005 (93) . Over the same period, foreign direct investment in the world’s richest economies increased from $172 billion to $380 billion over the same period (93) , indicating that investment in emerging economies has not occurred to the detriment of developed economies.
Although international businesses have existed for centuries, the world has clearly entered an era of unprecedented global economic activity that includes worldwide production and distribution, as well as increasingly large numbers of international joint ventures, multina- tional mergers and acquisitions, and global strategic alliances. Examples of new global operations and alliances abound, with almost every major firm earning more from their global than from their domestic opera- tions. Global companies such as ABB (Asea Brown Boveri), Honda, BP, Siemens, and Tata each do business in more than 100 countries (1;13;83;87) . The economic integration of the European Union and the introduction of the common European currency, the Euro, focused the world’s attention on transborder business activity and the importance of trading blocs. India and China, with their large populations and expanding economies, are rapidly becoming powerful forces in world markets. Although the U.S. and Canadian economies have been inextri- cably linked to the world economy for years, the signing of the North American Free Trade Agreement refocused Canadian, Mexican, and U.S.
attention on international business.
As Professor Ian Mitroff observes, “For all practical purposes, all business today is global. Those individual businesses, firms, industries, and whole societies that clearly understand the new rules of doing busi- ness in a world economy will prosper; those that do not will perish” (64:ix) . Mitroff challenges us to realize that “It is no longer business as usual. Global competition has forced ...[executives] to recognize that if they and their organizations are to survive, let alone prosper, they will have to learn to manage and to think very differently” (64:x) . 8 The Impact of Culture on Organizations GLOBAL STRATEGY AND CULTURE To succeed, corporations must develop global strategies (98) .4The final decades of the twentieth century made the importance of such recogni- tion commonplace, at least among leading firms and management scholars; the twenty-first century has made it imperative. Incorporating today’s global realities, new time- and quality-sensitive approaches to managing research and development, production, marketing, and finance have evolved rapidly. More recently an equivalent evolution in the understanding of international organizational behavior and man- agement of global human resource systems has developed. Although other functional areas have increasingly been using global financial, production, and marketing strategies that were largely unheard of—or would have been deemed inappropriate—only one or two decades ago, many firms are continuing to conduct the worldwide management of people as if neither the strategic challenges presented by the external economic and technological environment nor the internal structure and organization of the firm have changed. Focusing on global strategies and management approaches from the perspective of people and culture allows us to understand the influence of national and ethnic cultures on organizational functioning. Rather than becoming trapped within the commonly asked (and unfortunately misleading) question of whether organizational dynamics are universal or culturally specific, this book focuses on the crucially important ques- tions of whenandhow to be sensitive to culture. GOING GLOBAL: PHASES OF DEVELOPMENT As we investigate the influence of cultural diversity on multinational and global firms, it becomes clear that national cultural differences are indeed important, but that their relative impact depends on the stage of develop- ment of the firm, industry, and world economy. Using the model shown in Table 1-1, which traces the development of global enterpri ses, we can distinguish distinct variations in the relative importance of cultural diversity and, consequently, equally distinct variations in the most appropriate approaches to managing people worldwide (4;5;95) . Whereas historically the order of the phases has varied, depending primarily on the organization’s age and origin as an Asian, European, or North American firm, the order presented here reflects the most common evo- lution for North American firms. Today, as transnational dynamics increasingly define global business competitiveness, firms frequently skip phases in order to more rapidly position themselves to maximize their global competitive advantage. Culture and Management 9 DOMESTIC PHASE As shown in Tables 1-1 and 1-2, historically, most firms initially oper- ated from a domestic, or ethnocentric, perspective. Firms produced unique products and services that they offered almost exclusively to the domestic market. The uniqueness of the product or service and the lack of international competition negated the firm’s need to demonstrate sensitivity to national cultural differences. When firms exported prod- ucts, they often did so without altering them for foreign consumption.
Foreign buyers, rather than the home country product-design, manu- facturing, or marketing teams, absorbed the inconvenience of inherent cultural differences. In this phase, products from English-speaking countries, for example, were sent to non-English speaking countries without translating the packaging into the local language. In some ways the implicit message sent to people outside the home country was “We will allow you to buy our product”; and, of course, the assumption was that foreigners would want to buy. During this initial phase, people, assumptions, and strategies from the headquarter’s country dominated management: firms in the domestic phase regarded cross-cultural man- agement and global human resource systems as largely irrelev ant.
MULTIDOMESTIC PHASE Domestic competition ushered in the second phase, and with it the ini- tial need to market and produce abroad. Irrelevant during the initial domestic phase, sensitivity to cultural differences became critical to implementing effective corporate strategy in the multidomestic phase.
The domestic phase’s product orientation shifted to a market orienta- tion, with companies now needing to address each foreign market sep- arately and differently.
Whereas the unique technology of, and single market for, the domestic phase’s products and services fit well with an ethnocentric “one-best-way” approach, during the multidomestic phase firms began to assume there were “many good ways” to manage, each dependent on the particular country involved. Successful companies no longer expected foreigners to absorb cultural mismatches between buyers and sellers. Rather, home- country representatives modified their style to fit with that of their clients and colleagues in foreign markets. Although cultural differences became important in the design and marketing of culturally appropriate products and services, they became critical in worldwide production. Managers had to learn culturally appropriate approaches to managing people in each country in which the company operated.
MULTINATIONAL PHASE By the 1980s many industries had entered the multinational phase. The competitive environment for these industries had changed again, giving 10 The Impact of Culture on Organizations Culture and Management11 TABLE 1-1 Global Corporate Evolution Domestic Phase Multidomestic Phase Multinational Phase Global Phase Competitive strategy Domestic Multidomestic Multinational Global Importance of world Marginal Important Extremely important Dominant business Primary orientation Product/Service Market Price/Cost Strategy Product/service New, unique More standardized Completely standardized Mass-customized (commodity) Type of development Product engineering Process engineering Engineering not Product and process emphasized emphasized engineering Technology Proprietary Limited sharing Widely shared Almost instantly and extensively shared R&D/ Sales High Decreasing Very low Very high Profit margin High Decreasing Very low Initially high, yet immediately decreasing Competitors None Few Many Significant (few or many) Market Small and domestic Large and multidomestic Larger and multinational Largest and global Production location Domestic Domestic and primary Multinational, based on Global, least cost foreign markets least cost and best quality Exports None Growing, high potential Large, saturated Imports, exports, and “transports” Structure Functional divisions Functional with inter- Multinational lines Global alliances, flattened national division of business “heterarchy” Centralized Decentralized Centralized Coor dinated and decentralized Source:Adapted by Adler, 2007; based on Adler and Ghadar (5); with phases I-III based on Vernon (95) . rise to demands for culturally sensitive management practices within each firm. In multinational industries, a number of companies pro- duce almost indifferentiable products (practically commodities), with price defining their only potentially significant competitive advantage.
From this global price-sensitive—and therefore cost-se nsitive—per- spective, cultural awareness, vis-à-vis clients, declines in importance.
Price competition among almost identical products and services pro- duced by various multinational companies negates the importance of most cultural differences and almost all advantages gained by cultural sensitivity when marketing to customers worldwide. As shown in Table 1-2, the primary product design and marketing assumption is no longer the domestic phase’s “one best way” or even the multidomestic phase’s “many good ways,” but rather “one least-cost way.” The primary market becomes global, with almost no geography- based market segmentation. Firms can gain competitive advantage only through process engineering, sourcing critical factors on a worldwide basis, and benefiting from economies of scale. Price competition signif- icantly reduces the influence of cultural differences.
GLOBAL PHASE Many managers believed that the multinational phase would be the ulti- mate phase for all industries. Their assumption proved to be false.
Although some industries today continue to operate under the norms of the multinational phase, a fourth phase has emerged for firms in globally 12 The Impact of Culture on Organizations TABLE 1-2 Corporate Cross-Cultural Evolution Domestic Multidomestic Multinational GlobalPhase Phase Phase Phase Strategy Domestic Multidomestic Multinational Global Primary Product/ Market Price/Cost Strategy orientation Service Perspective Ethnocentric Polycentric or Multinational Global/ Regiocentric Multicentric Cultural Marginally Very Somewhat Critically sensitivity important important important important With whom No one Clients Employees Employees and clients Level No one Employees and Managers Executives, clients managers, employees and clients Strategic “One way” or “Many good “One least- “Many good assumption “One best way” ways” cost way” ways” Equifinality Simultaneously Source:Adapted by Adler, 2007; based on Adler and Ghadar (5). competitive industries. In this global (or transnational) phase, top qual- ity, least possible-cost products become the baseline, the minimally acceptable standard. Competitive advantage comes from strategic think- ing, mass customization, and outlearning one’s competitors. Product and service ideas are drawn from worldwide sources, as are the factors and locations of production. Companies, however, tailor final products and services and their marketing to discrete market niches. Critical com- ponents of this type of market segmentation are nationality and ethnic- ity. Culture, once again, becomes a critical competitive factor.Successful global firms competing under transnational dynamics need to understand their potential clients’ needs, no matter where in the world the clients live. They need to be able to quickly translate these worldwide client needs into products and services, produce those prod- ucts and services on a timely and least-cost basis, and then deliver them to clients in a culturally acceptable fashion for each of the national and ethnic communities involved. In the global phase, the exclusive product, sales, or price orientation of past phases almost completely disappears. Companies replace these indi- vidual orientations with a culturally responsive design orientation, accompanied by a rapid, worldwide, least-cost production function. The company that designs and brings to market the next new-best-thing wins.
Needless to say, culture is critically important at this most advanced stage.
Similarly, the ability to manage cross-cultural interaction, multinational teams, and global alliances becomes fundamental to overall business suc- cess. Whereas effective global human resource strategies varied from irrel- evant to helpful in past phases, in the global phase they have become essential, a minimum requirement for organizational survival and success.
CROSS-CULTURAL MANAGEMENT The importance of world business has created a demand for managers sophisticated in global management and skilled at working with people from countries other than their own (80) . Cross-cultural management explains the behavior of people in organizations around the world and shows people how to work in organizations with employee and client populations from many different cultures (24;41;71) . Cross-cultural man- agement describes organizational behavior within countries and cultures; compares organizational behavior across countries and cultures; and, most impor tant, seeks to understand and improve the interaction of co- workers, managers, executives, clients, suppliers, and alliance partners from countries and cultures around the world. Cross-cultural manage- ment thus expands the scope of domestic management to encompass international and multicultural dynamics. Rather than global management Culture and Management 13 being a subset of traditional domestic approaches, single-culture/domes- tic management is now recognized as a limited subset of global, cross- cultural management.
PAROCHIALISM Parochialism means viewing the world solely through one’s own eyes and perspective. A person with a parochial perspective neither recog- nizes other people’s different ways of living and working nor appreci- ates that such differences can offer significant opportunities or create serious consequences. People in all cultures are, to a certain extent, parochial. Journalists, politicians, and managers alike, for example, have frequently decried Americans’ parochialism. 5Americans speak fewer foreign languages, demonstrate less interest in other cultures, and are more naïve in global business situations than most of their trading partners. In The Tongue-Tied American (84) , U.S. Congressman Paul Simon deplored the shocking state of foreign language illiteracy in the United States and emphasized the heavy price Americans pay for it diplomatically, commercially, economically, and culturally. His message was a “shocking indictment of the complacent, potentially catastrophic monolingual arrogance of ...[Americans], from top government leaders to the ...[person] in the street” (90) . Echoing Simon’s sentiments in reference to South America, former U.S. Congressman James Symington explained the problem as Americans’ fundamental, dogged, appalling ignorance of the Latin mind and culture. Foreign students and statesmen refresh their perceptions of the United States by reading our poets, essayists, novelists and humorists. But our approach is like that of the man who, when asked which hurts most, ignorance or apathy, replied, “I don’t know and I don’t care.” Such indifference cannot be justified by our otherwise commendable concern for what people do rather than what they think....Preoc cupied with acting, we seldom miss opportunities to ignore thought. [Perhaps, in the future] . . . diplomats—possibly even presidents—might know something of the cultural lessons that stir our neighbors’ hearts (86). Fortune magazine reports that “A ‘Copernican revolution’ must take place in the attitudes of American CEOs as the international economy no longer revolves around the U.S., and the world market is shared by many strong players” (54:157) . Lester Thurow, former dean of MIT’s Sloan School of Management, asserts that CEOs “must have an understanding of how to manage in an international environment ....To be trained as an American manager is to be trained for a world that is no longer there” (34:50) . Similarly, Harvard management professor Rosabeth Moss Kanter asserts that “Global thinking is what’s important for companies today, 14 The Impact of Culture on Organizations not [simply] international operations” (50; also see 7;8;9;36;57;65;70;74;75;76) .
“The task is not to build a sophisticated structure, but to build a matrix in the minds of managers” (7:212) . Many business leaders predict that the next generation of top executives will have to perform well on multiple global assignments to reach the top (15:B18;20) . Royal Dutch Shell, for example, requires four expatriate assignments before it considers a manager for promotion into senior management. Yet in the United States such global exposure and experience has neither been the norm in the past nor, unfortunately, is it as common as it should be today (11) .
In the closing decades of the twentieth century, a Dun & Bradstreet survey found that only a handful of the 87 chairmen and presidents of the 50 largest U.S. multinational corporations could be considered career internationalists. Of the 87 top executives, 80 percent had had no international experience at all, except for inspection tours (25) .Today, executive recognition of the importance of global experience has increased, but not as rapidly in the United States as in many other parts of the world. For example, whereas almost two-thirds of today’s U.S.
executives see “emphasizing an international outlook” as very impor- tant for twenty-first century CEOs, only a third consider experience outside of the United States as equally important, and fewer than one in five consider foreign language training as very important (54:158) .By comparison, more than eighty percent of non-U.S. executives consider an international outlook as very important for future CEOs, twice as many (70% versus 35%) consider experience outside of their home country as very important, and more than three times as many (64% ver- sus 19%) consider foreign language training as very important (38;54:158) .
Why have many Americans ignored the need to think and to act globally? Americans’ historic parochialism is understandable and at the same time unfortunate. Because the United States has such a large domes- tic market (over 300 million people) and English has become the world’s business language, many Americans continue to assume that they nei- ther need to speak other languages nor to go to other countries to suc- ceed in business. Few young Brazilians, Israelis, Swedes, or Thais remain trapped in this parochial and privileged assumption. Historical U.S. political and technological dominance also led many Americans to believe that they could conduct business strictly from an American perspective. In many fields in which for years U.S. technology was the only advanced technology available, potential clients and trading partners from around the world had no option but to “buy American.” Global business expertise was unnecessary because the product sold itself (domestic phase). In the public sector, p rojects transferring tech- nology from the United States to economically developing countries further encouraged Americans to view the world from an American perspective (multidomestic phase). An Indonesian’s comments about Culture and Management 15 Americans’ views of people from economically developing countries capture this technologically based parochialism:The questions Americans ask me are sometimes very embarrassing, like whether I have ever seen a camera. Most of them consider them- selves the most highly civilized people. Why? Because they are accus- tomed to technical inventions? Consequently, they think that people living in bamboo houses or having customs different from their own are primitive and backward (79). The academic community further reinforced U.S. managers’ tendency toward parochialism. Most management schools are in the United States, the vast majority of management professors and researchers are U.S. edu- cated, and the majority of management research has focused on U.S.
companies. In a survey conducted in the 1980s of more than 11,000 arti- cles published in 24 management journals, approximately 80 percent reported on studies focusing on U.S. companies conducted by American researchers (2). Fewer than 5 percent of research articles describing the behavior of people in organizations included the concept of culture (2).
Less than 1 percent focused on people from two or more cultures work- ing together, a crucial area to understand for global business success (2).
The publishing of cross-cultural management articles is increasing much more slowly than the rate at which business has gone global (35;58;60;66) .
Even in the last decade, only 6.5 percent of organizational behavior and human resource management (HRM) articles published in leading U.S. management journals were international; however, almost three times as many (17.5%) organizational behavior and HRM articles in leading management journals published outside of North America were international (4). Among these international articles, almost every study (96%) found that culture had a significant impact on managerial styles and organizational success (4). The manager about to negotiate a major contract with a client from another country, the executive about to become director of Asian, European, or Latin American operations, and the newly promoted vice president for global marketing all receive less guidance than they need from the available management literature.
Cultural misunderstandings persist at the most sophisticated levels of intercultural interaction. In September 2005, for example:
[U.S.] Deputy Secretary of State Robert Zoellick gave a speech to the National Committee on United States-China Relations in which he repeatedly urged China to become a responsible ‘stakeholder’ in the international system. It turns out that there is no word in Chinese for ‘stakeholder,’ and the initial Chinese reaction was puzzlement and reaching for a dictionary. Did Mr. Zoellick mean ‘steak holder?’ 16 The Impact of Culture on Organizations After all, he was speaking at a dinner. Maybe this was some Texas slang for telling China it had to buy more U.S. beef? Well, eventually the Chinese got a correct interpretation (32). The United States will continue to have a large domestic market, English will continue to be the language of international business, and technological excellence will continue to typify many U.S. companies.
Nonetheless, the domain of business has rapidly moved beyond national boundaries; the limitations of monolingualism have become more apparent; and sustained technological superiority in many industries has become a cherished memory. The intense global competition of the past decade renders parochialism self-defeating. No nation can afford to act as if it is alone in the world (parochialism) or as if it is superior to other nations (ethnocentrism). The U.S. economy, like that of all other coun- tries, is inextricably linked to the health of the world’s economy. Like businesspeople the world over, Americans must now compete on a global scale and contribute based on world-class standards. GLOBAL VERSUS DOMESTIC ORGANIZATIONS Two fundamental differences between global and domestic organizations are geographic dispersion and multiculturalism. The term geographic dis- persion refers to the spread of global organizations’ operations over vast distances worldwide (51) . Whether organizations produce in multiple countries or only export to them, whether employees work as expatriates or only travel abroad, whether legal ownership involves joint ventures, wholly owned subsidiaries, or strategic alliances, global firms must man- age despite the added complexity of working in many countries simulta- neously. Geographic dispersion confronts organizations with political risk, fluctuations in exchange rates, substantial transportation and com- munication costs, varying regulatory structures, and many other com- plexities determined by greater distances and national borders.
Multiculturalism, the second fundamental dimension of global firms, means that people from many countries and/or cultures interact regularly. Domestic firms can be multicultural if their employees or clients come from more than one culture. 6Many organizations in Québec, for example, employ Anglophones (English speakers) and Francophones (French speakers) to work within the same organization. Similarly, many companies in California hire Hispanic and Asian as well as Anglo- Saxon employees. Multiculturalism adds to the complexity of global firms by increasing the number of perspectives, approaches, and business methods represented within the organization.
To successfully manage the geographical dispersion and multicultur- alism of multinational organizations, managers must develop a global Culture and Management 17 mindset (7;9;17;18;36;53;57;65;74;88) . In fact, it is the mindsets of key man- agers that shape business strategy and ultimately determine the success of the firm. Managers with a global mindset address strategic business decisions as cosmopolitans, always considering the broader world pic- ture rather than just the local situation (9 based on 63;42) . Similarly, using their highly developed cognitiv e complexity, managers with a global mindset simultaneously consider the complex multicultural situations facing the firm, and consistently make appropriate trade-offs among competing multinational options (9).
Whereas most books on global management have focused on understanding and managing geographical dispersion, this book focuses primarily on managing multiculturalism and raises such ques- tions as: How do people vary across cultures? How do cultural differ- ences affect organizations? When do global managers recognize cultural differences? What are the best strategies for managing multicultural- ism? How can companies best leverage cultural diversity, using it as a competitive advantage rather than viewing it as a source of problems? WHAT IS CULTURE?
To understand the differences between domestic and global manage- ment, it is necessary to understand the primary ways in which cultures around the world vary. Anthropology has produced a literature rich in descriptions of a full range of cultural systems, containing profound implications for managers working outside their native countries.
Anthropologists view culture in many ways. Culture is seen as “that complex whole which includes knowledge, belief, art, law, morals, cus- toms and any capabilities and habits acquired by a . . . [person] as a member of society” (86:1) . Alternatively, it is viewed as “a way of life of a group of people, the configuration of all the more or less stereotyped patterns of learned behavior, which are handed down from one gener- ation to the next through the means of language and imitation” (6:4) .
After cataloging more than 100 different definitions of culture, anthro- pologists Kroeber and Kluckhohn (55:181) offered one of the most com- prehensive and generally accepted definitions:
Culture consists of patterns, explicit and implicit, of and for behav- ior acquired and transmitted by symbols, constituting the distinc- tive achievement of human groups, including their embodiment in artifacts; the essential core of culture consists of traditional (i.e., historically derived and selected) ideas and especially their attached values; culture systems may, on the one hand, be consid- ered as products of action, on the other, as conditioning elements of future action. 18 The Impact of Culture on Organizations Culture is therefore (19:19) •Something shared by all or almost all members of a given social group •Something older members of a group pass on to younger members •Something (as in the case of morals, laws, and customs) that shapes behavior, or ...structures one’s perception of the world Managers frequently see culture as “the collective programming of the mind which distinguishes the members of one human group from another . . . the interactive aggregate of common characteristics that influence a human group’s response to its environment” (45:25) . In gen- eral, we see people as being from different cultures if their ways of life as a group differ significantly.
Cultural Orientations The cultural orientation of a society reflects the complex interaction of values, attitudes, and behaviors displayed by its members (43) . As shown in Figure 1-1, individuals express culture and its normative qualities through the values they hold about life and the Culture and Management 19 FIGURE 1-1 Influence of Culture on Behavior and Behavior on Culture Culture Values Behavior Attitudes world around them. These values in turn affect their attitudes about the form of behavior considered most appropriate and effective in any given situation. The continually changing patterns of individual and group behavior eventually influence the society’s culture, and the cycle begins again. What are the differences among values, attitudes, and behavior?
ValuesA value is that which is explicitly or implicitly desirable to an individual or group and which influences the selection from available modes, means, and ends of action. Values can be both consciously and unconsciously held (52) . Values therefore reflect relatively general beliefs that either define what is right and wrong or specify general preferences (16:23) . Research has shown that personal values affect corporate strategy (12;30;37;39;44;73;75;78;92) and that managerial values affect all forms of organizational behavior (7;29;68;69) , including selection and reward systems (16) , superior/subordinate relationships (61) , group behavior, communi- cation, leadership, conflict management styles (56) , and approaches to negotiating. Latin American managers, for example, consider loyalty to the family to be highly important—a value that leads them to hire com- petent members of their own family whenever possible. U.S. managers strongly believe in individual achievement—a value that leads them to emphasize a candidate’s track record and performance on qualifying exams rather than family membership. In both cases a strongly held value influences managerial behavior.
Attitudes An attitude expresses values and disposes a person to act or to react in a certain way toward something. Attitudes are present in the relationship between a person and some kind of object. Initial market research, for example, showed that French Canadians have a positive attitude toward pleasant or sweet smells, whereas English Canadians prefer smells with efficient or clean connotations. The first advertise- ments for Irish Spring soap directed at French Canadians therefore stressed the pleasant smell, whereas the ads directed at English Canadians stressed the inclusion of effective deodorants. 7 Behavior Behavior is any form of human action. For example, based on their culture, Middle Easterners stand closer together (a behavior) than do North Americans, whereas Japanese stand farther apart than do either North Americans or Middle Easterners. Latin Americans touch each other more frequently during business negotiations than do North Americans, and both touch more frequently than do Japanese. People’s behavior is defined by their culture.
CULTURAL DIVERSITY Diversity exists both within and among cultures; however, within a sin- gle culture certain behaviors are favored and others repr essed. The norm 20The Impact of Culture on Organizations for a society is the most common and most generally accepted pattern of values, attitudes, and behavior. In global business, for example, a man wearing a dark gray business suit reflects the norm through a favored behavior, whereas a man wearing a green business suit would violate the norm. A cultural orientation describes the attitudes of most people most of the time, never of all people all of the time. Accurate stereotypes reflect societal or cultural norms.
Societies enforce norms by communicating disapproval toward transgressors—people who engage in prohibited behavior. Some norms, such as laws, may be highly significant; whereas other norms, such as customs and habits, may be less important. A norm’s importance is measured by how severely society condemns those who violate it. In the United States, for example, an important norm proscribes bribery.
Companies caught using bribery to increase their business are publicly prosecuted and fined; both punishments reflect severe cultural sanc- tions. A less important norm in the United States is the tradition of say- ing “Good morning” when greeting colleagues at the beginning of the day. If I fail to say “Good morning” one day, it is unlikely that society will punish me severely. At worst, my colleagues may assume that I am pre- occupied or perhaps tired. Anthropologists Kluckhohn and Strodtbeck (52) discuss a set of assumptions that allows us to understand the cultural orientations of a society without doing an injustice to the diversity within the society. 8 The six assumptions (73) are as follows:
1. “There are a limited number of common human problems for which all peoples at all times must find some solutions.” Each society, for example, must decide how to clothe, feed, and house its people. Each society must decide on systems of justice, communication, education, health, commerce, transportation, and government.
2. “There are a limited number of alternatives which exist for dealing with these problems.” People, for example, may house themselves in tents, caves, igloos, single-family dwellings, or apartment build- ings, but they cannot survive the winter without some form of housing.
3. “All alternatives are present in all societies at all times, but some are preferred over others.” 4. “Each society has a dominant profile or values orientation and, in addition, has numerous variations or alternative profiles.” People may cure disease, for example, with chemotherapy, surgery, acupunc- ture, acupressure, prayer, or nutrition. Many Chinese prefer acu- pressure and acupuncture; many British prefer chemotherapy and surgery; many Indians prefer ayurvedic medicine and many Christian Scientists prefer prayer. Culture and Management 21 5. “In both the dominant profile and the variations, there is a rankordering of preference for alternatives.” 6. “In societies undergoing change, the ordering of preferences will not be clearcut.” As the cyber revolution changes society, for exam- ple, organizations’ preferences to comm unicate using the Internet, fax, telephone, e-mail, courier, or p ostal system become unclear; different organizations make different choices. These assumptions emphasize that cultural descriptions always refer to the norm or stereotype; they never refer to the behavior of all peo- ple in the culture, nor do they predict the behavior of any particu- lar person.
HOW DO CULTURES VARY?
As shown in Table 1-3, six basic dimensions describe the cultural ori- entations of societies: people’s qualities as individuals, their relation- ship to nature and the world, their relationship to other people, their primary type of activity, and their orientation in space and time (52;56) .
The six dimensions answer the questions: Who am I? How do I see the world? How do I relate to other people? What do I do? How do I use space and time? Each orientation reflects a value and each value has behavioral and attitudinal implications. As summarized in Table 1-4, this section introduces the six value dimensions and gives managerial examples for each. Because many people are familiar with U.S. busi- ness customs, the examples highlight differences between the mana- gerial practices in the United States and those in a number of other countries. HOW PEOPLE SEE THEMSELVES What is the nature of the individual:
good or evil? Americans traditionally see people as a mixture of good and evil, capable of choosing one over the other. They believe in the possibility of improvement through change. Some other cultures see 22 The Impact of Culture on Organizations TABLE 1-3 Values Orientation Dimensions Perception of Dimensions Individual Good Good and evil Evil Wo r l d Dominant Harmony Subjugation Human Relations Individual Laterally Hierarchical extended groups groups Activ ity Doing Controlling Being Time Future Present Past Space Private Mixed Public Source:Based on Kluckhohn and Strodtbeck (52) , as adapted by Lane and DiStefano (56) . Culture and Management23 TABLE 1-4 Cultural Orientations and Their Implications for Management Cultural U.S. Cultural Contrasting CulturalDimensions Orientation Orientation What is the nature Mixture of good and evil Good (Evil)of people? Change is possible. Change is impossible.
Example:Emphasize training and Emp hasize selection and fit; development; give people select the right person for the opportunity to learn the job; do not expect emp- on the job. loyees to c hange once hired.
What is a person’s People dominant over Harmony (Subjugation) relationship to the nature and other aspects external environment, of the external including nature? environment.
Example:Policy decisions made to Policy decisions made alter nature to fulfill to protect nature while people’s needs—i.e., m eeting people needs—i.e., building dams and roads. sustainable development.
What is a person’s Individualistic Group (Hierarchical relationship to or Lateral) other people? Example:Personnel director reviews Personnel director selects academic and employment the closest relative of the records of each candidate chief executive as the to select the best person best person for the job.
for the job.
Example: Individuals make decisions Groups make decisions What is the primary mode Doing Being (Controlling) of activity?
Example:Employees work hard to Employees work only as achieve goals; employees much as needed to earn maximize their time at enough to live; employees work. minimize their time at work.
How do people see space? Private Public Example:Executives hold important Executives hold important meetings in large offices meetings in open areas, behind closed doors with with open doors and a secretary screening out many interruptions from interruptions. employees and visitors.
What is a person’s Future/Present Past (Present) temporal orientation?
Example:Mission statement refers M ission statement this year to 5- and 10-year goals reflects policy statements while focus is kept on this 10 years ago; the company year’s bottom line and strives to use tradition to quarterly reports; innova- perform in the future as tion and flexibility to meet it has in the past.
a dynamic, changing future are emphasized.
Source: Adapted by Adler (3:411) updated 2007; based on Kluckhohn and Strodtbeck (52) and DiSte fano (23) ; also see Lane and DiStefano (56) . people as basically evil—as reflected in the Puritans’ orientation. Others see people as basically good—as reflected in utopian societies through- out the ages. Societies that consider people good tend to trust them a great deal, whereas societies that consider people evil tend to suspect or mistrust them. In high-trust societies, for example, people leave doors unlocked and do not fear being robbed or assaulted. In low-trust soci- eties, people bolt their doors. After making a purchase on the internet, people in high-trust societies expect to receive the merchandise and to have their credit card appropriately debited; they do not expect to be cheated. In low-trust societies, caveat emptor (“let the buyer beware”) rules the marketplace; one can trust only oneself. In many countries people are more trusting in rural comm unities than in urban centers.
Today’s web-mediated e-b usiness challenges buyers to trust unseen sellers, and sellers to assess their confidence levels in unseen buyers.
Today many citizens of the United States and Canada lament that their fellow citizens cannot be trusted the way they used to be. A Toronto hotel, for example, posts a sign reminding guests that “Love is leaving the towels.” Los Angeles gas stations, to assure that motorists will not drive away without paying, require motorists to pay twenty dol- lars or sign a credit card slip before filling their gas tanks. A Minneapolis firm, National Credential Verification Service, makes a profitable busi- ness of exploiting the lack of trust among corporate recruiters and job candidates by exposing résumé deception. Out of 233 personnel officers responding to a survey of Fortune 500 companies, only one said that deception by applicants for executive positions was diminishing (59:85) .
To add to this mistrust, many people find it more difficult to trust for- eigners than citizens of their own country.
Managers in the People’s Republic of China describe their approach as combining the extremes of good (Confucian tradition) with evil (the tradition of Lao Tzu)—a marriage of opposites. They also describe their belief that peasants are good while rich people are not so good, as reflected in a story told among people living in Tianjin, the fourth largest city in China:
At the Franco-Chinese joint venture winery in Tianjin between France’s Rémy Martin and China’s Dynasty, a French director left his wallet filled with French francs in a ped-a-cab. The ped-a-cab driver, a peasant, waited all day outside the winery to return the wallet to the Frenchman.
Perhaps because people fear the unknown, they frequently tend to assume that evil intentions motivate foreigners’ behavior. Canadian gov- ernment officials, for example, thought the Inuits, a native people, were evil when they burned down the doors in their Canadian-built public 24 The Impact of Culture on Organizations housing projects. The officials misinterpreted the Inuits’ behavior as vandalism and therefore judged it to be evil, whereas the Inuits had actually altered the houses to fit their normal more collective—and therefore doorless—lifestyle. The Canadian government condemns the destruction of property, whereas the Inuits condemn closed doors that separate people from family members and neighbors.Apart from their tendencies toward good or evil, can human beings improve themselves? Societies and organizations vary in the extent to which they believe that adults can change or improve. Organizations that believe people can change, for example, emphasize training and develop- ment, whereas organizations that believe people are incapable of change emphasize selection systems. With today’s Internet and information systems revolution, some organizations have chosen to replace many of their current administrative-support personnel with e-technology and information systems experts. Other companies have retrained their current Culture and Management 25 PERCEPTION OF THE INDIVIDUAL Good Versus Evil Can a Bosnian Trust a Canadian Working in Sweden? 9 A young Canadian in Sweden found summer employment working in a restaurant owned by Bosnians. As the Canadian explained, “I arrived at the restaurant and was greeted by an effusive Bosnian man who set me to work at once washing dishes and preparing the restaurant for the June opening.
“At the end of the first day, I was brought to the backroom. The owner took an old cash box out of a large desk. The Bosnian owner counted out my wages for the day and was about to return the box to the desk when his private pho\ ne rang in the front room. The owner hesitated: should he leave me sitting in the room with the money or take it with him? Quite simply, could he trust me?
“After a moment, the man got up to answer the phone, leaving me with the open money box. I sat there in amazement: how could he trust me, someone he had known for less than a day, a person whose last name and address he didn’t even know?” This incident contrasts perceptions of individuals as good or evil. The Bosnian manager saw individuals as good and inherently trustworthy. For this reason, he could leave his new employee alone with the money without worrying that the Canadian would steal it before he returned. The Canadian employee’s surprise that this stranger trusted him with the money is a reflection of a North American’s values orientations toward individuals. Believing that people are capable of both goo\ d and evil, most North Am ericans would proceed more cautiously than did the Bosnian.
If the Canadian had been in the owner’s shoes, he probably would have taken the cash box with him to the other room to answer the telephone, fearing that the money might be stolen. 26The Impact of Culture on Organizations employees to use the new state-of-the-art technologies. The first strategy— primarily hiring new employees—assumes that change is not possible, whereas the second strategy of training present employees implies that change is possible. North Americans’ emphasis on MBA education and executive development seminars strongly reflects their belief that change is possible. The Chinese saying that the “Chinese ...strive to become better and, when better, to become perfect” also reflects a strong belief in the ability of adults to change. As one Shanghai execu- tive exclaimed, applying the belief to his own career path, “I was trained as an engineer and now I am an export/import manager. I changed!” PEOPLE’S RELATIONSHIP TO THE WORLD What is a person’s relationship to the world? Are people dominant over their environment, in harmony with it, or subjugated by it? North Americans generally see themselves as dominant over nature. Other societies, such as traditional Chinese and Navaho, attempt to live in harmony with nature.
They see no real separation between people and their natural environment, and their beliefs allowed them to live for many generations at peace with the environment. In contrast to both of these orientations, a few remote tribal societies see people as subjugated by nature. In these cultures people accept and honor, rather than interfere with, the inevitable forces of nature. How does an organization see its environment? Are the relevant external environments—cultural, economic, legal, political, social, and technological—seen as stable and predictable or as chaotic, turbulent, and unpredictable? Does an organization assume that it can control its environment, that it must harmonize with it, or that it will be domi- nated by it? North Americans’ approach to agriculture exemplifies the dominance orientation. By assuming, for instance, that people can and ethically should modify nature to enhance their own well-being, dominance- oriented agribusiness executives use fertilizers, pesticides, and genetically modified seeds to increase crop yields. By contrast, harmony-oriented farmers attempt only to plant the “right” crops in the “right” places at the “right” time of the year in order to maintain the soil in good condition.
Farmers subjugated by nature hope that sufficient rain will fall, but they do not construct irrigation systems to assure s ufficient water for their crops. Although they hope or pray that pests will not attack their crops, they refuse to use insecticides. Other examples of North Americans’ dominance orientation include astronauts’ conq uest (dominance) of space, economists’ structuring of markets, sales represen- tatives’ attempts to influence buyers’ decisions, and, perhaps most con- troversial today, the attempts by biotechnology and genetic engineering Culture and Management27 HOW DO I RELATE TO THE WORLD? Dominance Versus Harmony Given the rapid expansion of their Asian practice, an American law firm chose to add a newly promoted American partner to its Asian headquarters in Shanghai.
The Shanghai lawyers gave the new expatriate American partner a prominent office and encouraged her to decorate it herself. Having studied Chinese culture in the months prior to leaving the United States, the American expatriate chose to place a large, particularly artistically rendered Chinese painting of a fish in her office, immediately to the left of the door. She had learned that a fish symbolizes lasting prosperity, as the pronunciation in Chinese of the word “fish” suggests that “You will make a profit and the profit will stay with you.” The partner was therefore very surprised to watch one Chinese client after another become uncomfortable upon entering her office; with many choosing not to meet with her a second time. Within a week, she grew frustrated and increas- ingly upset by her potential clients’ behavior. Luckily, she sought the help of the local Feng shuimaster. Feng shui , or “wind water,” are earth forces which many traditional Chinese believe can cause success or failure. Feng shuireflects the belief that people and their activities are affected by the orientation and layout of buildings, rooms, and objects, including in offices and homes. The goal of feng shuiis for people to remain in harmony with the environment. The feng shui master explained that the problem was the placement of the paint- ing. The head of the fish, which faced the door, symbolized that profit would flow away from the client and out the door. The expatriate executive had been right a bout the overall symbolism of the fish. However, based on Chinese cultural tradition, the closeness of the fish painting to the door, and the fact that the fish’s head faced the door, had created exactly the opposite message of the one the American lawyer had tried to convey. With the guidance of the feng shuimaster, the fish paint- ing was re-located above the lawyer’s desk, far away from the door. Chinese clients immediately stopped reacting negatively to the American lawyer’s office. Her Asian practice grew st eadily, with more than an average amount of success. In the ensuing months, there were no business failures or other dire business consequences. The expatriate’s clients were comfortable with her new office and ultimately chose to bring her their most important legal work. Chinese and North American perceptions of the world clearly differ.
Traditional Chinese desire to be in harmony with nature, whereas most North Americans want to control nature. The American expatriate partner did not yet know enough about Chinese culture to create harmony with nature. From a \ North American dominance perspective, the fish painting, and its placement in her office would be irrelevant. But to traditional Chinese, her choice to hang a fish painting close to the door, and with the head of the fish pointing toward the door, appeared irrational; from the Chinese perspective, the American had failed to achieve harmony with nature and was unnecessarily bringing a lack of luc\ k to alter the nature of life itself. The contrasting relationships become clearer in the sayings of three societies:A society’s orientation toward the world is pervasive. When Sir Edmund Hillary reached the top of Mt. Everest, for example, the Western do minance- oriented press reported the story as “Man conquers moun tain”; in con- trast, the Chinese harmony-oriented press reported the same story as “Man befriends mountain.” Religious writings similarly reflect a people’s cultural orientation. The Bible, for example, states in Genesis, “Let them have dominion over the earth”; whereas the Tao Te Ching states, “Those who would take over the earth and shape it to their will, I notice, never succeed”— a dominance orientation contrasting with one of harmony.
PERSONAL RELATIONSHIPS: INDIVIDUALISM OR COLLECTIVISM 11 Americans are individualists; they use personal characteristics and achievements to define themselves, and they value individual welfare over that of the group. By contrast, in group-oriented societies people define themselves as members of clans or communities and consider common goals and the group’s welfare most important. Lateral group membership includes all who are currently members of a particular family, community, or organization. Hierarchical group membership has a temporal definition; it includes current members of the particu- lar group and members from prior generations. The United States is strongly individualistic and weak in loyalty to groups, teams, and communities. Americans, for example, praise their sports heroes by singling out individual excellence: “Mark Smith and the 28 The Impact of Culture on Organizations Saying Culture Reflected Meaning Ayorama:
“It can’t be helped” Inuit—Canada Subjugation En Shah Allah: “If God is willing” Moslem—Arab Harmony with nature and submission to God Can Do:
“I will do it” American—U.S. Dominance to herself and her clients. By consulting the feng shuimaster and changing the location of the painting, the expatriate American exhibited a more profound sen- sitivity to the local culture and demonstrated true respect for her clients’ beliefs and traditions. 10 HOW DO I RELATE TO THE WORLD? Dominance Versus Harmony (continued) Culture and Management29 team trounced the opposition.” They praise corporate performance by singling out and rewarding the chief executive officer (CEO). General Electric’s outstanding financial performance over the past 20 years has been most frequently attributed to former CEO Jack Welch, as in the sub- title of the book Control Your Destiny or Someone Else Will: How Jack Welch Is Making General Electric the World’s Most Competitive Company (89) .
Compared with people in more group-oriented societies, Americans are more geographically mobile and their relationships, especially with co-workers, are less permanent. Due to its individualistic orientation, the United States has been described as a temporary society with temporary sys- tems, uprootedness, disconnectedness, nonpermanent relationships, and mobility (10) . More group-oriented societies, such as Japan, China, and the Israeli kibbutzim, emphasize group harmony, unity, and loyalty. Individuals in these societies frequently fear being personally ostracized or bringing shame to their family or group for behavior that deviates from the norm. Personnel policies can follow more individual or more group orienta- tions. Individual-oriented personnel directors tend to hire those best qual- ified to do the job based on personal skills and expertise. Individualistic applicants will therefore submit résumés listing personal, educational, and professional achievements. Group-orien ted personnel directors also tend to hire those most qualified, but the prime qualifications they seek are trustworthiness, loyalty, and compatibility with co-workers. They hire people who are well known to them, including friends and relatives of people already working for the organization. Therefore, rather than PERSONAL RELATIONSHIPS Individualism Versus Collectivism The German Won’t Hire the Serbian’s Daughter 12 Rade, an engineer who had immigrated to western Germany from the former Yugoslavia, worked for a highly respected German engineering firm. His daughter Lana had recently graduated as one of the top students from a prestigious German university. Rade considered it his duty to find his daughter a job, and he wanted his German boss to hire Lana. Although the boss felt Lana was extremely well qualified for the open position, he refused to have a father and daughter working in the same office. The very suggestion of hiring family members was repugnant to him. Rade believed that his boss was acting unfairly—he saw no problem in his daughter working with him in the same office.
The unfortunate outcome was that Lana was neither considered nor hired; the boss lost respect for Rade; and Rade became so upset that he requested a trans- fer to a new department. Neither Rade nor his boss understood that the conflict was caused by the fundamental difference in their values orientations. 30The Impact of Culture on Organizations sending well-prepared résumés listing individual achievements, applicants seek introductions to the personnel director through a mutual friend or relative; and initial discussions center on mutual friends, family, or com- munity members. The managing director of one group-oriented company in Ghana expressed his belief that only people who are known by other employees in the company can possibly be trusted to act responsibly.
These personnel managers’ actions can appear biased, illogical, and unfair when viewed from the perspective of a contrasting culture. Many individualistic North Americans see group-oriented hiring practices as nepotism because they see these practices only from their own culture’s perspective. Many more group-oriented Latin Americans question the ethics of North American managers, who choose not to be loyal to their friends and family (92) .
The organization of firms in individualistic and collectivist societies differs. In individualistic societies, such as those of Canada and the United States, organization charts generally specify individual positions, each with a detailed job description listing formal duties and responsibil- ities. By contrast, organization charts in more group-oriented societies, such as Hong Kong, Indonesia, and Malaysia, tend to specify only sections, departments, and divisions, except for the top one or two positions (72) .
Group-oriented societies describe assignments, responsibilities, and reporting relationships in collective terms.
The individual versus group orientation also influences decision mak- ing. In North America, individuals make decisions. North Americans, therefore, make decisions relatively quickly, although implementation frequently gets delayed while the decision maker explains the decision and gains concurrence from other members of the organization. By con- trast, in Japan, a group-oriented culture, many people make the decision rather than just one. The process of group decision making is less flexible and more time-consuming than the individualistic system because con- currence must be achieved prior to making the decision. However, because all parties already understand and concur, the Japanese are able to implement a decision almost immediately after it is made. AC TIVITY: DOING OR BEING Americans’ dominant mode of activity is doing,or action. They stress achieving outcomes that they can measure by objective standards; that is, standards believed to be external to the particular individual and capable of being consistently applied to other situations and outcomes.
Managers in doing-oriented cultures often motivate employees with promises of promotions, raises, bonuses, and other forms of public recognition. The contrasting orientations are being andcontrolling .In the being orientation, people, events, and ideas flow spontaneously; Culture and Management31 people stress release, indulgence of existing desires, and living and working for the moment. If managers in being-oriented cultures do not enjoy their colleagues and current projects, they quit; they will not work strictly for future rewards. The doer is more active; the person focused on being is more relaxed. The doer actively tries to achieve the most in life; the person focused on being wants to experience life as it is. The doing and being orientations affect planning quite differently.
Being-oriented managers view time as generational, and therefore believe that planning should allow for the extended time needed for true change to occur. Major projects often need a generation, or cer- tainly a decade, to achieve significant results. Managers are focused on allowing change to occur at its own, often slow, pace. They do not push or rush things to achieve short-term results. By contrast, doers believe that planning can speed up the change process if plans are carefully ACTIVITY Doing Versus Being Kashmir Versus Sweden 13 The United Nations appointed a Swedish army officer as an observer in Kashmir. His job was to travel around the turbulent province situated between Pakistan and India looking for troop movements on each side. The officer and his family moved into a houseboat on the river in Srinagar, the capital of the province. As has been custom- ary for Europeans working in Kashmir, the family employed a local “boy”—a servant— to perform all the family’s household services during their stay. The servant was always very polite and pleasant, cooked delicious meals, and kept the houseboat ne\ at and clean.
The family was very pleased with his work, and after a short time decided to give him a raise. Surprisingly, the servant did not turn up for work the next day, and his little brother arrived in his place. On his new higher salary, the servant had employed his younger brother to work for the family. With the raise he could maintain his own desired standard of living and help his younger brother without personally having to work.
Consistent with the Kashmiri servant being a Hindu, he did not believe that he could improve his standard of living in his lifetime. So by being good and not disturbing the harmony of his circumstances (i.e., by simply being), he believed he could be reincarnated into a higher position in his next life. This natural ten- dency to accept life with no expectations for either improvement or material goods contrasts sharply with the Swedish family’s notion of working hard to achieve personal goals and improve one’s material lot in this life (i.e., their doing orientation). The Swede’s surprise at seeing the younger Kashmiri brother arrive for work reflects this contrast. 32The Impact of Culture on Organizations thought out, specific target dates set, and progress frequently reported (77) . Be-ers believe that this type of planning is possible but unwise, because it rarely works immediately and is fruitless in the long run.
The activity orientation also explains why people work. To achieve goals, doers maximize work; to live fully, be-ers minimize work.
Increasing the salaries of doers and be-ers has opposite effects. Salary increases motivate most doers to work more hours because the rewards are greater; they motivate most be-ers to work fewer hours because they can earn enough money in less time and still enjoy life. U.S. expa- triate managers (doers), using salary as a motivational tool, made a costly mistake when they raised the salaries of a group of rural Mexican workers (be-ers), only to discover that by doing so they had decreased the total hours that these particular Mexicans wanted to work.
Similarly, Canadians working in Malaysia found that workers were more interested in spending extra time with their family and friends than in earning overtime pay bonuses. Americans who want a more balanced life, with more time at home, are in effect questioning one of their culture’s core values. TIME: PAST, PRESENT, OR FUTURE What is the temporal focus of human life? What relationship does a given society have toward time? Is the society oriented toward the past, present, or future? Past-oriented cultures believe that plans should be evaluated in terms of their fit with the customs, traditions, and the TIME The Long Term Versus The Short Term A Question of Contracts 14 The directors of a Japanese firm and a Canadian firm met in Vancouver to negoti- ate the sale of coal shipments from British Columbia to Japan. The compa\ nies arrived at a stalemate over the length of the contract. The Japanese, ostensibly to reduce the uncertainty in their coal supply and to assure continuous, stable pro- duction in Japan, wanted the Canadians to sign a 10-year contract. The Canadians, on the other hand, did not wish to commit themselves to such a lengthy a\ greement in the event that they could find a more lucrative offer in the interim. Whereas the Japanese wanted to reduce the level of risk in their coal supply, the Canadians revealed their willingness to risk losing a steady buyer in exchange for the flexibility needed to remain open to future, potentially more profitable future clients.
The negotiations had hit a snag. Unless the culturally based time frame of the contract could be resolved, no contract would be signed. A deal that would ben- efit both parties had a distinct possibility of remaining unconsummated. Culture and Management33 historic wisdom of society and that innovation and change are justified only to the extent that they fit with past experience. By contrast, future-oriented cultures believe that they should evaluate plans in terms of their projected future benefits. Future-oriented cultures jus- tify innovation and change mostly in terms of future economic bene- fits; they have less regard for past social, cultural or organizational customs and traditions.
In contrast with most North Americans, many Europeans are more past-oriented. Many Europeans believe that preserving history and conserving past traditions remain important, whereas North Americans give tradition less importance. North American business- people focus on the present and near future; they may talk about achieving five- or 10-year plans, but they work toward achieving this quarter’s results while keeping a daily focus on share-price. North American employment practices also reflect a short-term orientation.
Employees who do not perform well during their first year with an organization are fired or at best not promoted. U.S. companies do not give new employees 10 y ears to demonstrate their worth. Japan by con- trast, has traditionally had a more long-term, future-oriented time hori- zon. Traditionally, when large Japanese firms hired employees, both parties made a commitment for life. Major Japanese firms invested in years of training for each employee because they could expect the employee to work with the firm for 30 to 40 years. North American firms have normally invested far less in training because a lifetime com- mitment between the company and the employee was neither given nor expected. TIME A Past Orientation The People’s Republic of China Whereas odysseys to outer space lur e more future-oriented Americans to movie houses, historical dramas have traditionally led box-office sales in China, and the more ancient the story, the better. Chinese children, so far, have no space-age superman to emulate. Even at play, they pretend to be the Monkey King, the supernatural hero of a famous medieval epic (62:12) .
Similarly, Chinese scientists look to the past for inspiration. In the national archives, teams of Chinese meteorologists comb voluminous weather record\ s of the last 300 years in an effort to discover patterns that might help them predict the droughts and floods that still plague the country. Seismologists in charge of improving China’s earthquake prediction methods use similar long-term, past- oriented approaches (62) . 34The Impact of Culture on Organizations Societies use different standards of temporal precision. Culture defines when people are considered to have arrived late and when they are judged to be on time for work, meetings, or business lunches. The amount of leeway depends on the particular culture. How long managers expect scheduled appointments to last—five minutes or two hours— also depends on the cultures involved.
What is the typical length of a project assignment—one week or three years? A U.S. engineer working in Bahrain expressed surprise at his Arab client’s response to his apologetic explanation that, “Unfortunately, due to unforeseen delays, the new plant would not be ready to open until six months after the originally planned date.” The Bahrainian responded, “We have lived for thousands of years without this plant; we easily can wait another six months or a year. This is no problem.” Diversity exists within societies as well as between societies. Past-, present-, and future-oriented people exist within every society.
Comparing lawyers and economists in the United States highlights this temporal diversity. U.S. lawyers use a past orientation in citing prece- dent to adjudicate the outcome of cases, whereas economists use a future orientation in conducting cost-benefit analyses to predict the possible risks and revenues of alternative corporate and governmental strategies over the next five to 10 years. SPACE: PUBLIC OR PRIVATE How do people use physical space? Is a conference room, an office, or a building seen as public or private space? When can I enter an office directly, and when must I wait outside until granted permission to enter? The public versus private dimension defines the arrangement of organizational space. North Americans give private offices to more important employees, and even separate open-plan offices with parti- tions between desks. They hold important meetings behind closed doors, usually in the executive’s large, private office, and generally allow minimal interruptions. The Japanese, by contrast, use no partitions to divide desks; bosses often sit together with their employees in the same large room. Middle Easterners often have numerous people present during important meetings—some related, and some not related, to the issues being dis- cussed. Both Middle Easterners and Japanese have a more public orien- tation to space than do most North Americans. By contrast, German and British businesspeople typically exhibit an even more private ori- entation than do most North Americans. When visitors meet a German manager for the first time, the German’s secretary must generally announce the guests before the German manager’s closed office door will be opened to admit them. Culture and Management35 SUMMARY Cultures vary in distinct, significant, and predictable ways. Our ways of thinking, feeling, and behaving as human beings are neither random nor haphazard but rather are profoundly influenced by our cultural heritage.
Until we leave our community, we often remain oblivious to the dynam- ics of our own culture. As we come in contact with people from other cul- tures, we become aware of our uniqueness and begin to appreciate our differences. In interacting with foreigners, we learn to recognize and value our fundamental humanity—our cultural similarities and dissimilarities.
For years, many managers chose to believe that organizational functioning was beyond the influence of culture; they operated as if organizational out- comes were determined only by task and technology. Today we know that neither work nor success is simply a mechanistic outgrowth of either tech- nology or task. At every level, culture profoundly influences the behavior of organizations as well as the behavior of people within organizations. Q UESTIONS FOR REFLECTION 1.Individual Cultural Self-Awareness. As summarized in Table 1-4, which values do you think best reflect your personal orientation on each of the six dimensions? Why? Think of an example of your own behavior that fits each values orientation.
2. National Cultural Self-Awareness. Describe your country’s domi- nant culture on each of the six values orientations. What concrete evidence do you have supporting the position of your country’s culture on each dimension? If managers from a foreign country were observing your culture for the first time, what would they observe that would convince them of your culture’s position on each of the values orientations?
3. Cross-Cultural Awareness. Think about a cross-cultural situation you have been in—a situation in which you are working or negoti- ating with people from another culture. Describe their values ori- entations on each of the six dimensions. Where do your own values and their values orientations differ? What problems have been caused or might be caused by the differences in your values orien- tations? What benefits could you potentially gain by using the dif- ferences between your two cultures to your advantage?
4. Cross-Cultural Interaction Skills .Select a situation reported in the international press involving people from more than one cul- ture (such as Russians negotiating a trade agreement with Indians).
Analyze the situation using one or more of the values dimensions.
In what ways do the values differences increase the probability of a successful outcome? In what ways might the values differences decrease the chances of success? 36The Impact of Culture on Organizations 5.Parochialism and Ethnocentrism .In what ways is your culture parochial? In what ways is it ethnocentric? Give concrete examples from situations that you have observed or that you have read about in the press. As a consultant, how might you help the managers from your culture to act in a less parochial way? How might you assist them to act in a less ethnocentric way? FILM N OTE The British Broadcasting Corporation video program “World Without Borders” documents the evolution of a multinational firm, Cable and Wireless, from its domestic origins through the multidomestic stage, and into its current multinational and planned transnational strategies.
European and North American professors comment on Cable and Wireless’s strategy and competitive environment, while presenting frame- works for understanding and managing the evolution of global firms.
(Director: Steve Wilkinson, The British Broadcasting Corporation, Open University Production Centre, Walton Hall, Milton Keynes, England MK7 68H; Tel: 44-1908-655-343; Fax: 44-1908-655-300) N OTES 1. Blaise Pascal’s Pensées,60 (294) , as cited in Hofstede’s Culture’s Consequences (45; 46) .
2. Unless otherwise stated, all dollar figures are in U.S. dollars.
3. Arguments for both the pessimistic and optimistic appreciations of shift- ing world business dynamics summarized by Professor Arshad Ahmad, Concordia University, Montreal, Canada.
4. Adapted from material originally appearing in the “Preface” by Nancy J. Adler of Lane, DiStefano and Maznevski’s International Management Behavior (56:xii–xvi) .
5. Although the term American literally refers to all peoples from North and South America, it is used in this book as a shorthand way to refer to citi- zens of the United States of America.
6. Domestic multiculturalism refers to multiple cultures within a particular country. Multi-culturalism, as it is used in this book, refers to internation- al multiculturalism; that is, many cultures represented from multiple countries.
7. As conducted and cited by Jim Cornell et al., “Cultural Aspects Influencing Advertising Messages Aimed at French Canadians” (Working Paper, McGill University), interview with Jacques Grenier of Publi Plus, Inc., March 10, 1982.
8. Kluckhohn and Strodtbeck (52) reflect a North American perspective in their work. Their framework is therefore most accurate in describing Western cultures.
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WORK BEHAVIOR VARIES ACROSS CULTURES In what ways does the behavior of people in organizations vary across cultures? Researchers have observed systematic and culturally based dif- ferences in managers’ values, attitudes, and behaviors. Each of us has a set of attitudes and beliefs—filters through which we see management situations. Figure 2-1 shows how managers’ beliefs, atti- tudes, and values affect behavior. To a certain extent, beliefs, attitudes, and values cause both vicious and benevolent cycles of behavior. Douglas McGregor, an early American management theorist, gave us prototypical examples of this pattern in his classic “Theory X” and “Theory Y” mana- gerial styles (17) . According to McGregor, Theory X managers do not trust their subordinates and believe that employees will not do a good job unless closely supervised. These managers establish tight control systems—such as time clocks and frequent employee observation—to reassure themselves that employees are working. The employees, realizing that management does not trust them, start behaving irresponsibly— they arrive on time only when the time clock is working and only work when the manager is watching. The manager, observing this behavior, 44 becomes more distrustful of the employees and installs even tighter control systems. According to McGregor, the manager’s belief that employees cannot be trusted leads to the employees’ irresponsible behavior, which in turn reinforces the manager’s belief that employees cannot be trusted—a vicious cycle and a counterproductive, yet self-fulfilling, prophecy.McGregor’s Theory Y describes a more benevolent cycle. Managers who trust their employees give them overall goals and tasks without instituting tight control systems or close supervision. The employees, believing that management trusts them, do their best work whether or not their manager is watching them. The manager, seeing that the employees are present and working, becomes more convinced that they can be trusted. Managers’ attitudes influence their own behavior, which in turn influences their employees’ attitudes and behavior, which then reinforce the managers’ original attitudes and behavior. Managers communicate respect for and trust in their employees in different ways, depending on their cultural background. Managers from more specific cultures, for example, tend to focus only on behav- ior that takes place at work, whereas managers from more diffuse cul- tures focus on a wider range of behavior, including behavior taking place in employees’ private and professional lives. As a part of a major cross-cultural management study, Fons Trompenaars and Charles Hampden-Turner (21) , a world-renowned Dutch and British management How Cultural Differences Affect Organizations 45 Reinforces Manager’s Beliefs Manager’s Values, Beliefs, and Attributes Manager’s Behavior Employees’/Subordinates’ Behavior Reinforces Manager’s Beliefs Pattern Within a Culture:
Example: Manager’s Belief:
Employees can't be trusted Manager’s Behavior:
Install tight control systems Employees’ Behavior:
Act as “irresponsible kids,” seeing what they can get away with FIGURE 2-1 Influence of Managers’ Attitudes on Employees’ Behavior: A Self-Fulfilling Prophecy Source:Based on McGregor (17) ; adapted by Adler, 2007. research and consulting team, asked managers from around the world if their companies should provide employees with housing. Whereas most managers from such diffuse cultures as the former Yugoslavia (89%), Hungary (83%), China (82%), and Russia (78%) believe that the company should provide housing, managers from more specific cultures reject the idea as interfering with employees’ private lives (21:86) .
Less than 20 percent of managers from such specific cultures as Australia, Denmark, France, the Netherlands, Sweden, Switzerland, the United Kingdom, and the United States believe that providing housing is a good idea (21:86) . Managers from diffuse cultures communicate their respect by showing concern for an employee’s whole life. By contrast, managers from specific cultures demonstrate their respect by not 46 The Impact of Culture on Organizations MANAGEMENT Trusting or Naive Canadian Employees and Filipino Management 1 A Canadian bank employee described his Filipino boss’s low-trust approach to management:
While working at the Royal Bank, I had a most unbearable and suspicious manager who had authority over all administrative employees, including me. The problem was that he seemed to totally distrust his subordinates. He constantly looked over our shoulders, checking our work, attitudes, and punctuality.
Although most of his employees resented this treatment, they recognized \ that he was an extremely conscientious supervisor who honestly believed in what he called “old-style” management. He really thought that employees are lazy \ by nature. He therefore believed that he must pressure them into working. As the manager, he felt justified in treating his employees severely. I found his attitude condescending and counterproductive. As a group, the employees thought of themselves as basically trustworthy. However, we decided that since our boss showed no respect for us, we would give him the same treat- ment in return. This resulted in a work environment filled with mistrust and hos- tility. The atmosphere affected everyone’s work: employees became less and less willing to work, and the manager increasingly believed that his employees were lazy and that he needed to be severe with them. Luckily, the situation caught the eye of a senior manager, who resolved it after lengthy discussions. Only then did it become clear that we were not seeing the situation in the same way. From the manager’s perspective, he was simply showing his caring and involvement with his subordinates. As he explained, Filipino employees who were not treated like this might have felt neglected and unimportant. Unfortunately, we were not Filipinos and, as Canadians, we did not respond as many Filipinos might have responded. intruding in employees’ private lives. It is easy to see how misunderstand- ing and mistrust can grow between managers from one culture and employees from another culture.
WORLDWIDE DIFFERENCES IN MANAGERIAL STYLE André Laurent (15) , a highly acclaimed professor at INSEAD, (a leading international management school located in France), studied the philoso- phies and behaviors of managers in nine Western European countries, the United States, and three Asian countries (Indonesia, Japan, and China). Laurent asked managers from each country to describe their approaches to more than 60 common work situations. He found dis- tinctly different patterns for managers in each of the countries.
Task and Relationship In response to the statement, “The main reason for a hierarchical structure is so that everybody knows who has author- ity over whom,” for example, managers from some countries strongly agreed, whereas managers from other countries strongly disagreed. As shown in Table 2-1, most U.S. managers disagree with the statement; they believe that the main reason for a hierarchical structure is to organize tasks and facilitate problem solving around those tasks. Coming from an extremely task-oriented culture, many Americans believe that a flat organization with few hierarchical levels—in which most employees work as colleagues rather than bosses and subordinates—can function effectively. They believe that such minimal hierarchy is possible if tasks and roles are clearly defined and the organization is not too large. By contrast, many managers from more relationship-oriented cul- tures, such as most Asians, Latin Americans, Middle Easterners, and Southern Europeans, strongly agree with Laurent’s statement. Eighty- three percent of Indonesian managers reported that the main reason for a hierarchical structure was to have everyone know who has authority over whom. They did not believe that even a small organization could exist, let alone succeed, without a formal hierarchy. How Cultural Differences Affect Organizations 47 Text not available due to copyright restrictions Perhaps these different beliefs explain some problems that can occur when Americans work, for example, with Indonesians. Americans typi- cally approach a project by outlining the overall goal, designating each of the major steps, and then addressing staffing needs. Their approach goes from task to people. Indonesians, on the other hand, typically want to first know who will manage the project and who will work on it.
Once they know who the leader will be and the hierarchy of people involved, they can assess the project’s feasibility. The Indonesians’ approach goes from people to task. Both cultures need to understand the project’s goals and staffing arrangements, but the importance of each is reversed. An American would rarely discuss candidates for proj- ect director before at least broadly defining the project, whereas Indonesians would rarely discuss project feasibility before knowing who would be leading the project.
Similarly, in response to the statement, “In order to have efficient work relationships it is often necessary to bypass the hierarchical line,” Laurent found large and consistent differences across cultures. As shown in Table 2-2, Swedish managers see the least problem with bypassing.
They are task oriented and value getting the job done; to Swedes, solving problems means going directly to the person most likely to have the needed information and expertise, and not necessarily to their boss.
Most Swedish managers believe that a perfect hierarchy—in which their boss would know everything—is impossible; they therefore view bypass- ing as a natural, logical, and appropriate way for employees to work effi- ciently in today’s complex and rapidly changing organizations. By contrast, most Italians, being more relationship oriented than the Swedes, consider bypassing the boss as an act of insubordination. Most Italian managers believe that frequent bypassing indicates a poorly designed organization. Italians therefore respond to bypassing by repri- manding the employee or redesigning the hierarchical reporting structure.
Imagine the frustration and potential for failure when Swedes form joint ventures and strategic alliances with Italians. When Swedish employees 48 The Impact of Culture on Organizations TABLE 2-2 “In Order to Have Efficient Work Relationships, It Is Often Necessary to Bypass the Hierarchical Line.” More Task Oriented More Relationship Oriented Disagreement Rate Across Countries United Great Nether- Sweden States Britain France lands Germany Indonesia Italy China Spain 26% 32% 35% 43% 44% 45% 51% 56% 59% 74% Source: Laurent (15) , updated and expanded, 2007. 2 begin working in a typical Italian organization, they will attempt to accomplish their work goals responsibly by continually bypassing hier- archical lines and going directly to the people in the organization whom they believe have the needed information and expertise. Because the Swedes do not first consult their new Italian boss, the Italian will assume that the Swedes are insubordinate and hence a threat to both the alliance and the project. In the reverse situation, the Swedish boss will rapidly become frustrated with her Italian subordinates’ constant communication and seemingly endless requests for information and permission. Before long, the Swedish boss will assume that Italian employees lack initiative and are neither willing to use their personal judgment nor to take risks. Why else, asks the Swedish manager, would the Italians always consult me, the boss, before acting on matters for which the boss need not be consulted? Is either side right? No, they are just different.
Managers: Experts or Problem Solvers?Laurent found little agreement across national borders on the nature of the managerial role. As shown in Figure 2-2, more than four times as many Indonesian and Japanese managers as U.S. managers agreed with the statement, “It is impor tant for managers to have at hand precise answers to most questions their How Cultural Differences Affect Organizations 49 Image not available due to copyright restrictions subordinates may raise about their work.” Most U.S. managers believe that the role of the manager is to be a problem solver: managers should help their employees discover ways to solve problems, rather than sim- ply answering their questions directly. Furthermore, U.S. managers believe that merely providing answers discourages subordinates’ initia- tive and creativity and ultimately diminishes their productivity. By con- trast, the French generally see the manager as an expert. Most French managers believe that they should give precise answers to subordinates’ questions in order to maintain their credibility as experts and as man- agers. They believe that their subordinates’ sense of security depends on receiving precise answers. Most French believe that people should not hold managerial positions unless they can give precise answers to most work-related questions. (See page 83, the Iranian’s view, for another example of the expert perspective.)Is a manager primarily an expert or a problem solver? Again, the question has no single right answer because organizations from differ- ent cultures maintain different beliefs. Problems, however, arise when managers from one culture interact with managers and employees from other cultures. When an American manager tells French employees, “I don’t know the answer, but maybe if you talk to Simon in marketing he will know,” the French employees do not assume that they have received appropriate problem-solving help but rather assume that their American boss is incompetent. Similarly misunderstanding the situation, American employees who receive specific answers from their French boss may consider the boss egotistical rather than competent: “Why didn’t the French boss tell us that Simon in marketing is the expert and has the most up-to-date answer?” Laurent concludes that the national origin of Asian, European, and North American managers significantly affects their views on how effective managers should manage (15:77) . Overall, the extent to which managers see organizations as primarily political, authoritarian, role- formalizing, or hierarchical-relationship systems varies according to their country of origin (15) . DIMENSIONS OF DIFFERENCE Differences in work-related attitudes exist across a wide range of cul- tures. Geert Hofstede, an eminent Dutch management researcher, corroborated and integrated the results of Laurent’s and others’ research. In a 40-country study (11) , which was later expanded to more than 60 countries worldwide (5;9;10;12;13) , 160,000 managers and employ- ees working for a U.S. multinational corporation were surveyed twice.
Hofstede, like Laurent, found highly significant differences in the behavior and attitudes of employees and managers from each country 50 The Impact of Culture on Organizations even though they worked within the same multinational corporation— differences that did not change over time. Hofstede found that national culture explained more of the differences in work-related values and attitudes than did position within the organization, profession, age, or gender. In summarizing the most important differences, Hofstede ini- tially found that managers and employees varied on four primary dimensions: individualism/collectivism, power distance, uncertainty avoidance, and career success/quality of life. 3Later, Hofstede and his colleagues identified a fifth dimension, Confucian dynamism (5;13) .
Individualism and Collectivism Individualism exists when people define themselves primarily as separate individuals and make their main commitments to themselves. Individualism implies loosely knit social networks in which people focus primarily on taking care of themselves and their immediate families. Collectivism is characterized by tight social networks in which people strongly distinguish between their own groups (in-groups, such as relatives, clans, and organizations) and other groups. Collectivists hold common goals and objectives, not individual goals that focus primarily on self-interest. People in collective cultures expect members of their particular in-groups to look after them, pro- tect them, and give them security in exchange for their loyalty to the group. Two-thirds of all surveyed Arab executives, for example, thought employee loyalty was more important than efficiency (18) . This dimen- sion reflects values similar to those of the individual/group values orien- tation discussed in Chapter 1 (6).
Collectivism characterizes such cultures as the Japanese, in which people believe that the will of the group should determine members’ beliefs and behavior. This belief is reflected in the Japanese saying, “The nail that sticks out will be pounded down.” By contrast, free will and self-determination characterize individualistic cultures such as that of the United States, where individuals believe that each person should deter- mine his or her own beliefs and behavior. In each nation, cultural beliefs become self-fulfilling. People from individualistic cultures also often believe that certain universal values should be shared by all. People from collectivist cultures, on the other hand, accept that different groups hold different values. Being individualistic, most North Americans believe that democracy—especially North American–style democracy—ideally should be shared by all countries worldwide. Many people from collec- tivist cultures find such a view both hard to understand and unacceptable. Collectivist cultures control their members more through external societal pressure (shame), whereas individualistic cultures control their members more through internal pressure (guilt). Members of collectivist cultures place more importance on fitting in harmoniously How Cultural Differences Affect Organizations 51 and saving face. Members of individualistic cultures place more empha- sis on individual self-respect. In many ways the two orientations trade off individual freedom against collective protection: Do I do what is best for me or what is best for the group? Do I take care only of myself or does the group take care of me? Do I expect the boss to hire me because I have the right education and work experience (individual) or because I come from the right family or social class (group)? Do I expect to be promoted on the basis of my performance in the company or on the basis of my seniority with the company? In times of economic reces- sion, do I expect that the least productive workers will be laid off or that every employee will take a pay cut? Figure 2-3 shows the ranking of 52 The Impact of Culture on Organizations FIGURE 2-3 Position of 60 Countries on Power Distance and Individualism/Collectivism Note:See Table 2-3 for list of abbreviations.
Source: Geert Hofstede, Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, 2d ed. (Thousand Oaks, CA: Sage Publications, 2001), 217. Copyright © Geert Hofstede. COS PAK COLPERSAL WAF VEN GUAPAN MAL PHI ECAIDO YUG MEX GRE BRA TUR IRA SAF ISR AUT FIN DENNZL CAN NET GER IRE SWI NOR SWE ITA USA GBR AUL BELFRA SPA JPN IND ARA ARGJAM URU THACHLEAFHOK SIN TAIKOR POR Small Power Distance/ Collectivistic Large Power Distance/Collectivistic Small Power Distance/ Individualistic Large Power Distance/Individualistic POWER DISTANCE INDEX Collectivist INDIVIDUALISM INDEX countries on the individualism/collectivism dimension, and Table 2-3 shows the abbreviations used in Figures 2-3, 2-4, and 2-5.The Dutch-British management research team of Fons Trompenaars and Charles Hampden-Turner also found that managers worldwide vary markedly in their orientation toward individualism and collectivism (21) . Among other questions, they asked m anagers which of the following two options would be most likely to improve the quality of life (21:47) :
1. Giving individuals the maximum opportunity to develop them- selves; or 2. Having individuals continuously taking care of their fellow human beings The vast majority of American (79%), Canadian (79%), and Norwegian managers (76%), for example, selected the first option stressing individ- ual freedom, whereas most managers in Nepal (69%), Kuwait (61%) and Egypt (59%) selected the second option stressing collective responsi- bility (21:48) .
Which is better, individualism or collectivism? The answer is neither and both. In complex societies and organizations, however, forming a synthesis between opposites has become increasingly necessary (8).
Individualism and collectivism complement each other, with their rela- tionship being “essentially circular with two starting points” (21:55) .
Individualistic and collectivist cultures go through . . . [the same] cycles, but starting at different points [with each reversing what the other considers to be ends and means]. The individualistic culture sees the individual as “the end” and improvements How Cultural Differences Affect Organizations 53 TABLE 2-3 Country Abbreviations as Used in Figures 2-3, 2-4, and 2-5 ARA Arab countries FRA France JPN Japan SAL El Salvador ARG Argentina GBR Great Britain KOR Korea (S.) SIN Singapore AUL Australia GER Germany (W.) MAL Malaysia SPA Spain AUT Austria GRE Greece MEX Mexico SWE Sweden BEL Belgium GUA Guatemala NET Netherlands SWI Switzerland BRA Brazil HOK Hong Kong NOR Norway TAI Taiwan CAN Canada IDO Indonesia NZL New Zealand THA Thailand CHL Chile IND India PAK Pakistan TUR Turkey COL Columbia IRA Iran PAN Panama URU Uruguay COS Costa Rica IRE Ireland PER Peru USA United States DEN Denmark ISR Israel PHI Philippines VEN Venezuela EAF East Africa ITA Italy POR Portugal WAF West Africa ECA Ecuador JAM Jamaica SAF South Africa YUG Yugoslavia FIN Finland Source:Based on Hofstede (10:70) ; adapted by Adler and Gundersen, 2007. 4 54The Impact of Culture on Organizations to collective arrangements as the means to achieve it. The collectivist cul- ture sees the group as its end and improvements to individual capacities as a means to that end (21:55) .
Power Distance The second cultural dimension, power distance, reflects the extent to which less powerful members of organizations accept an unequal distribution of power. How willing are employees to accept that their boss has more power than they have? Is the boss right because he or she is the boss (high power distance) or only when he or she knows the correct answer (low power distance)? Do employees do their work in a particular way because the boss wants it that way (high power distance) or because they personally believe that it is the best way to do it (low power distance)? INDIVIDUALISM AND COLLECTIVISM The Pacific Area Travel Association 5 A global market research firm in Tokyo conducted a survey of travel market potential for the Pacific Area Travel Association (PATA), an organization of national tourist offices from various Pacific Rim nations. Although they conducted the survey through a standard questionnaire, each nation was invited to submit a few of its own open-ended questions.
All countries responded promptly. Of the ten countries surveyed, the U.S.
Department of Commerce was the first to send in its questions. The same individ- ual’s name was always attached to each letter from the United States.
Shortly after completing the PATA survey, the company received a contract for a similar study for the Association of Southeast Asian Nations (ASEAN). Due to the similar content, the researchers attempted to conduct the ASEAN study in an almost identical fashion to the PATA survey. They requested open-ended questions from the national tourism offices of Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Because they had completed the collection of qu\ estions in a little over a month for PATA, the company assumed six weeks would be more than sufficient for the ASEAN nations. They were wrong! The ASEAN nations required considerably more time than did the PATA countries. The market research firm had to exchange many letters and faxes with the Philippines and Tokyo before it received their final responses. Moreover, every communication from the Philippines bore a different individual’s name on it as its sender.
In thinking over these responses, the researchers concluded that the contrast between the Americans’ and the Filipinos’ responses to the same task stemmed from the relative emphasis on the individual versus the group. Whereas the U.S.
office gave sole responsibility to an individual, the more group-oriented F\ ilipinos delegated the task to a whole department. Since the Philippines office involved everyone in the task, it naturally took longer. How Cultural Differences Affect Organizations55 In high power-distance countries, such as India, the Philippines, Poland, and Venezuela, managers and employees consider bypassing to be insubordination; whereas in low power-distance countries, such as Israel and Denmark, employees expect, and are expected, to bypass their bosses frequently in order to get their work done (19) . When nego- tiating in high power-distance countries, companies find it important to send representatives with titles equivalent to or higher than those of their counterparts from the other organization. Titles, status, and formal- ity command less importance in low power-distance countries. As shown in Figures 2-3 and 2-4, the United States ranks relatively low on power distance.
Uncertainty Avoidance The third cultural dimension, uncertainty avoid- ance, reflects the extent to which people in a society feel threatened by ambiguity and therefore try to avoid ambiguous situations by providing greater certainty and predictability. Organizations reduce uncertainty by establishing more formal rules, rejecting deviant ideas and behavior, accepting the possibility of identifying absolute truths and attaining unquestionable expertise, and providing their employees with greater career stability. Offering lifetime employment, for example, is more com- mon in high uncertainty-avoidance countries such as Greece, Japan, and Portugal; whereas high job mobility occurs more commonly in POWER DISTANCE An American Executive in London 6 An American executive moved to London to manage his company’s British head- quarters. Although the initial few weeks passed relatively uneventfully, it bothered the executive that visitors were never sent directly to his office. A visitor first had to speak with the receptionist, then the secretary, and then the office manager.
Finally the office manager would escort the visitor to see the American executive.
The American became annoyed with this practice, which he considered a total waste of time. When he finally spoke with his British employees and urged them to be less formal and to send visitors directly to him, they were chagrined.
After a number of delicate conversations, the American executive began to understand the greater emphasis on formality and hierarchy in England. He slowly learned to ignore his impatience when the British greeted guests using t\ heir more formal, multistep approach. Visitors to the British headquarters continued to see the receptionist, secretary, and office manager before being sent to meet the American. 56The Impact of Culture on Organizations low uncertainty-avo idance countries such as Denmark and Singapore.
The United States, with its very high job mobility, ranks relatively low on uncertainty avoidance.
As shown in Figure 2-4, common images of organizations vary markedly depending on a country’s orientation in terms of power distance and uncertainty avoidance. People in countries such as Denmark that rank low on both dimensions see organizations as FIGURE 2-4 Position of 60 Countries on Power Distance and Uncertainty Avoidance Note:See Table 2-3 for list of abbreviations.
Source: Geert Hofstede, Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, 2d ed. (Thousand Oaks, CA: Sage Publications, 2001), 152. Copyright © Geert Hofstede. Adapted by Adler, 2007. SIN IND EAF JAM DEN SWEIRE USACAN SAF NET NZL AUT GERFINSWI ISR THA ECA IRAPAK TAI BRACOL PER KOR SAL BEL URU JPN POR GRE FRA ITA COS ARG SPA VEN MEX TUR CHL YUG PAN GUA ARA WAF IDO PHI MAL HOK GBR NOR AUL ”Village Market” Small Power Distance/ Weak Uncertainty Avoidance ”Traditional Family” Large Power Distance/ Weak Uncertainty Avoidance UNCERTAINTY AVOIDANCE INDEX Weak ”Well-Oiled Machine” Small Power Distance/ Strong Uncertainty Avoidance ”Pyramid of People” Large Power Distance/ Strong Uncertainty Avoidance Small Strong POWER DISTANCE INDEX Large How Cultural Differences Affect Organizations57 resembling village markets: the organizations have little hierarchy, everyone talks with everyone else, and risk taking is both expected and encouraged.
Employees in high power-distance/low uncertainty-avoidance coun- tries, such as Singapore and the Philippines, tend to view their organi- zations as traditional families. As the traditional head of the family, the father protects family members phy sically and economically. In exchange, the family expects loyalty from its members. Reflect ing the same dynam- ics, bosses in Singapore expect to take care of their employees in exchange for the employees’ loyalty. Employees in countries such as the former Yugoslavia and Mexico, which are high on both dimensions, tend to view their organizations as pyramids of people rather than traditional families. Everyone in the organization knows who reports to whom, and formal lines of commu- nication run vertically, never horizontally, up and down the organiza- tion. In pyramid organizations, management reduces uncertainty by emphasizing who has authority over whom. Pyramid organizations resemble a fire department: not only is it clear who is chief, but the fire chief ’s word becomes law (high power distance). The department clear- ly defines all procedures and tolerates little or no questioning or deviance—little or no ambiguity. When the alarm rings, firefighters do not stop to discuss who will drive the pumper or who will ride on the hook and ladder, because management has previously clearly defined each role and task. In high uncertainty-avoidance/low power-distance countries such as Israel and Austria, organizations tend to resemble well-oiled machines:
they operate highly predictably without needing a strong hierarchy.
Most North American post offices provide excellent examples of this type of organization: they reduce uncertainty by clearly defining roles and procedures.
Career Success and Quality of Life The fourth cultural dimension contrasts societies focused more narrowly on career success with those more broadly emphasizing quality of life. 7Career-success societies emphasize assertiveness and the acquisition of money and things (materialism), while not showing particular concern for people. By contrast, quality-of-lifesocieties emphasize relationships among people, concern for others, and the overall quality of life.
Societies that stress career success usually define women’s and men’s roles more rigidly and narrowly than do quality-of-life societies. For e xample, women may drive trucks or practice law and men may become pre- school teachers, nurses, or house husbands more easily in societies empha- sizing quality of life than in those stressing traditional career success. As shown in Figure 2-5, the Scandinavian countries strongly emphasize quality of life, the United States emphasizes career success more than qual- ity of life, and Japan and Austria strongly emphasize career success.
Japanese and Austrians generally expect women to stay home and to care for children without following a career outside the home. The United States encourages women to work, but offers them only a limited amount of support for company-sponsored maternity leaves and child care. The Swedes expect women to work outside the home; Sweden offers parents the option of paternity or maternity leave to take care of newborn children and the state provides day-mothers to care for older children.
58The Impact of Culture on Organizations FIGURE 2-5 Position of 40 Countries on Uncertainty Avoidance and Career Success/Quality of Life Note:See Table 2-3 for list of abbreviations.
Source: Geert Hofstede, Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, 2d ed . (Thousand Oaks, CA: Sage Publications, 2001), 334. Copyright © Geert Hofstede. Adapted by Adler, 2007. SIN JAM HOK MAL IND GBR PHI SWI GER AUT VEN MEX CAN WAF IRA PAK ARA ARG BEL GRE JPN ECA ITA COL THA URU SAL PER SPA ISRTUR PAN BRA CHL KOR FRA COS FIN NET NOR SWE DEN IDO EAF TAI POR YUG GUANZL AUL USASAF IRE Weak Uncertainty Avoidance/ Quality of Life Weak Uncertainty Avoidance/ Career Success Weak UNCERTAINTY AVOIDANCE INDEX Strong Uncertainty Avoidance/ Quality of Life Strong Uncertainty Avoidance/ Career Success Strong Quality of Life CAREER SUCCESS/QUALITY OF LIFE INDEX Career Success How Cultural Differences Affect Organizations59 The career-success/quality-of-life dimension strongly affects work- place motivation. Japanese quality circles,for example, primarily strive to achieve maximum quality (career success/high uncertainty avoidance); whereas the innovative Swedish work groups—originally used at Volvo— attempt to enhance job satisfaction and flexibility (high quality of life/low uncertainty avoidance). Because societies emphasizing quality of life also often create high-tax environments, extra income frequently fails to strongly motivate employees (in Sweden, for example). Conversely, societies emphasizing career success often develop into lower-tax envi- ronments in which extra income and other visible signs of career success effectively reward achievement (in the United States, for example).
Confucian Dynamism After identifying the first four dimensions, Hofstede and his Hong Kong-based colleague, the eminent cross-cultural psychologist Michael Bond, conducted the first global management survey ever developed with Chinese managers and employees. Based on this survey, Hofstede and Bond identified a fifth dimension, Confucian CAREER SUCCESS AND QUALITY OF LIFE Swedish Managers’ Supposedly Inadequate Business Commitment 8 Swedish policy allows parents to take paternity or maternity leave at their discre- tion. When Sweden first initiated the policy, the managing director of the Swedish Postal Service created an uproar by announcing his intention to take paternity leave for a number of months to stay home with his newborn child. At a press con- ference, he explained that executives do not differ from other employees: everyone wants and needs to balance work with family life. He also explained that he believed that any organization that cannot function for a period of time without its managing director had no raison d’être.
Swedish expatriate managers often do not have the opportunity to explain their desire for balancing their professional and private life to their colleagues from other countries. Swedes frequently surprise their international clients when they end the work week on Friday at 5 p.m. or announce their intention to fly home at the end of the day because they want to spend more time with their families.
Swedish businesspeople describe many of their international colleagues, \ especially Americans, as willing to work all evening and all weekend just to finish an impor- tant project. Americans, on the other hand, frequently resent the Swedes’\ behav- ior, judging it to reflect an inadequate commitment to work. In actuality, the Swedes’ choices simply demonstrate their strong commitment to quality of life, whereas the Americans and other similar foreigners behave according to their equally strong commitment to the particular project (career-success orientation). dynamism,which measures employees’ devotion to the work ethic and their respect for tradition (5;13) . Many observers attribute the rapid eco- nomic growth in the 1990s of Asia’s “Four Tigers”—Hong Kong, Singapore, South Korea, and Taiwan—to their extremely strong work ethic and commitment to traditional Confucian values (13;10) .
Rules and Relationships Building on the work of Laurent and Hofstede, Trompenaars and Hampden-Turner (21) conducted a major survey of more than 15,000 managers in 40 countries. In addition to results that corroborate those of their colleagues, they went beyond the prior work to document additional dimensions and to highlight some of the ethical issues posed by managers misinterpreting conflicting cul- tural signals.
Trompenaars and Hampden-Turner (21:34) , for example, asked man- agers from around the world to consider what they would do in the fol- lowing situation:
You are riding in a car driven by a close friend. He hits a pedestri- an. You know he was going at least 35 miles per hour in an area of the city where the maximum allowed speed is 20 miles per hour.
There are no witnesses. His lawyer says that if you testify under oath that he was only driving 20 miles per hour it may save him from serious consequences. What right has your friend to expect you to protect him?
a. My friend has a definite right as a friend to expect me to testify to the lower figure.
b. He has some right as a friend to expect me to testify to the lower figure.
c. He has no right as a friend to expect me to testify to the lower figure.
What do you think you would do in view of the obligations of a sworn witness and the obligation to your friend?
1. Testify that he was going 20 miles an hour.
2. Not testify that he was going 20 miles an hour.
In response to this situation, managers expressed a wide range of opinions. More than 90 percent of managers in Canada (96%), the United States (95%), Switzerland (94%), Australia (93%), Sweden (93%), Norway (93%), and Western Germany (91%) said that society’s rules were made for everyone and that, therefore, their friend had no right to expect them to testify falsely (21:35) . They consequently w ould not testify that their friend was driving at 20 miles per hour when the truth was that he was driving faster (21:35) . By contrast, fewer than half the managers in South Korea (26%), Venezuela (34%), Russia (42%), Indonesia 60 The Impact of Culture on Organizations (47%), and China (48%) would refuse to support their friend and would therefore testify for him (21:35) .
Why do such extreme differences characterize the managers’ responses? The underlying dimension separating those who would and would not testify falsely is whether the society believes more in univer- salism or particularism. Managers who refuse to testify adhere to more universalistic values. Universalistic societies, such as Canada and the United States, believe that laws apply to everyone and that they there- fore must be upheld by everyone at all times. The general (or universal- istic) principle of what is legal, or illegal, takes precedence over the par- ticular details of who is involved in the specific situation. By contrast, in particularist societies, such as South Korea and Venezuela, the nature of the relationship determines how someone will act in a particular situa- tion. To a person from a particularist culture, it makes a difference if someone is a best friend or family member. For a person from a uni- versalistic culture, it makes no difference what my relationship is to a particular person; rules are seen as applying equally to everyone. Ask yourself what you would do in the situation. Then ask yourself, if it had been your mother or daughter driving the car, would you be more or less likely to testify than you would be for a friend? How much differ- ence does relationship make for you? When is loyalty more important than truth? When is truth more important than loyalty? Although firms tend to become more universalistic as they operate more globally, clashes between universalistic and particularistic cultures remain legendary. Univer salistic cultures, for example, rely on extensive and specific contracts to document the “rules” of doing business together, whereas particularistic cultures use much more loosely written agree- ments and rely on the strength of their personal relationships to maintain the commitment. Particularists view detailed contracts, and espe cially penalty clauses, as a sign that they are not trusted and that therefore no relationship exists. They consequently feel little need to adhere to the con- tract. Interestingly, as many Asian, Middle Eastern, and Latin cultures have shown, personal relationships can, at times, be more durable than con- tracts, as well as more flexible. Clearly, joint ventures, strategic alliances, and overall business nego- tiations between universalists and particularists raise ethical questions, from both cultures’ perspectives:
Businesspeople from both societies ...tend to think [of ] each other [as] corrupt. A universalist will say of particularists, “they cannot be trusted because they will always help their friends”; a particularist, conversely, will say of universalists, “you cannot trust them: they would not even help a friend” (21:32) . How Cultural Differences Affect Organizations 61 Coming from a particularistic culture, a team of Brazilian negotia- tors explained to us that they only tell the truth once they have gotten to know the other party; that is, once they have developed a personal relationship. They described American and Canadian negotiators, who often accused Brazilians of lying, as naïve for not understanding how negotiating really works. The Americans, for whom truth is an absolute—a “universal” that is unrelated to the particular negotiation or the particular people involved—accused Brazilians of acting deceit- fully. Americans tell the same “truth” to everyone, without regard for the nature or depth of the relationship. Brazilians tailor their com- ments, their “truth,” to the particular individuals involved. Both sides consider truth and relationship to be important, however the relative emphasis on truth telling versus loyalty causes marked differences in behavior. ARE ORGANIZATIONS BECOMING MORE SIMILAR?
Are organizations becoming more similar worldwide or are they main- taining their cultural dissimilarities? Is the world gradually creating one way to conduct business or is the world maintaining a set of distinct markets defined by equally distinct national boundaries, each with its own culturally distinct approach to business? The question of convergence versus divergence has puzzled global managers for years. If people around the world are becoming more sim- ilar, then understanding cross-cultural differences should become less important. If people are remaining dissimilar, then understanding cross-cultural differences in organizations will become increasingly important. To clarify this dilemma, John Child (4), a leading British management scholar, compared research on organizations across cultures. Reviewing a myriad of cross-cultural studies, he found one group of highly rep- utable management scholars repeatedly concluding that the world is becoming more similar and another equally reputable group of schol- ars concluding the opposite—that the world’s organizations are main- taining their dissimilarity. Looking more closely, Child discovered that most studies concluding convergence focused on macro-level issues— such as the organization’s structure and its technology—whereas most studies concluding divergence focused on micro-level issues—in partic- ular, the behavior of people within organizations. We can therefore conclude that organizations worldwide are growing more similar, while the behavior of people within them is maintaining its cultural unique- ness. Organizational structures and strategies in Canada and Germany 62 The Impact of Culture on Organizations may look increasingly similar from the outside, but Canadians and Germans continue to behave in their own culturally distinct fashion within each organization. Although both Germans and Canadians, for example, install robotics in their factories, each culture interacts differ- ently with the robotics.
ORGANIZATIONAL CULTURE AND NATIONAL CULTURE Over the last decade, managers and researchers have increasingly recog- nized the importance of organizational culture as a socializing influence and climate creator (2;3;10;14;22) . Unfortunately, rather than enhancing our understanding of national cultures (1;20) , our understanding of organizational culture has often tended to limit it. Many managers believe that organizational culture moderates or erases the influence of national culture. They assume that employees working for the same organization—even if they come from different countries—will behave more similarly than differently. They implicitly believe that national cul- tural differences only become important in working with foreign clients, not in working with international colleagues within their own organization.
Does organizational culture erase or at least diminish national culture? Surprisingly, the answer is no (16) . Employees and managers bring their cultural background and ethnicity to the workplace. As described earlier, Hofstede found striking cultural differences within a single multinational corporation. In his study, national culture explained 50 percent of the differences in employees’ attitudes and behaviors.
National culture explained more of the differences than did professional role, age, gender, or race (11) .9 Even more strikingly, Laurent found more pronounced cultural dif- ferences among employees from around the world working within the same multinational company than among those working for organiza- tions in their native lands. After observing managers from nine Western European countries and the United States who were working for companies in their native countries (e.g., Swedish managers working for Swedish companies, Italian managers working for Italian compa- nies), Laurent replicated his research in a single multinational corpo- ration with subsidiaries in each of the ten original countries. He assumed that managers working for the same multinational corpora- tion would behave more similarly than their domestically employed colleagues. Instead, as shown in Figure 2-6, he found the managers employed by the multinational maintaining and even strengthening How Cultural Differences Affect Organizations 63 64The Impact of Culture on Organizations 18% 8% 53% 77% United States United States France France 6% 4% 24% 46% United States United States France France 36% 12% 56% 38% United States United States France France 52% 85% 32% 46% United States United States France France Percentage Agreeing Percentage Agreeing Percentage Agreeing Percentage Agreeing “It is important for a manager to have at hand precise answers to most questions subordinates may raise about their work.” “Most organizations would be better off if conflict could be eliminated forever.” “Most managers have a clear notion of what we call an organizational structure.” “Most managers seem to be more motivated by obtaining power than by achieving objectives.” Multiple Companies Single MNC Multiple Companies Single MNC Multiple Companies Single MNC Multiple Companies Single MNC FIGURE 2-6 Organization Culture Magnifies Cross-Cultural Differences Source: André Laurent, INSEAD. Fontainebleau, France. Adapted by Adler, 2007. their cultural differences. The cultural differences were significantly greater among managers working within the same multinational cor- poration than they were among managers working for companies in their own native countries. When working for multinational compa- nies, Germans seemingly became more German, Americans more American, Swedes more Swedish, and so on. Surprised by these results, Laurent replicated his research in two additional multinational corpo- rations, each with subsidiaries in the same nine Western European countries and the United States. Similar to the results from the first company, corporate culture did not reduce or eliminate national dif- ferences in the second and third corporations. Far from reducing national differences, organizational culture maintains and enhances them.Why might organizational culture enhance national cultural differ- ences? Neither managers nor researchers know the answer with certainty.
Perhaps pressure to conform to the organizational culture of a foreign- owned company brings out employees’ resistance, causing them to cling more firmly to their own national identities. Perhaps our ethnic culture is so deeply ingrained in us by the time we reach adulthood that a com- pany’s organizational culture cannot erase it. Perhaps other as-yet unexplained forces are operating. The unambiguous conclusion remains, however, that employees maintain or enhance their culturally specific ways of working when employed by multinational or global organizations. SUMMARY Laurent’s research documents a wide range of cultural differences in work- related values, attitudes, and behavior. Hofstede’s five dimensions— individualism/collectivism, power distance, uncertainty avoidance, career success/quality of life, and Confucian dynamism—along with Trompenaars and Hampden-Turner’s additional dimensions, highlight the most important cultural differences influencing organizations. To manage effectively in either a global or a domestic multicultural envi- ronment, we must recognize which differences are operating and learn to use them to our advantage, rather than either attempting to ignore the differences or simply allowing them to cause problems. Chapter 3 presents various ways in which we perceive, describe, interpret, and evaluate cultural differences. Chapter 4 then explores approaches organizations can take to benefit from the diversity of cultural back- grounds among their employees. The myth that organizations can operate “beyond nationality” remains, in reality, a myth. How Cultural Differences Affect Organizations 65 Q UESTIONS FOR REFLECTION 1.Cultural Self-Awareness. Where is your culture located on Hofstede’s original four dimensions and on universalism/particularism? How does your organizational culture differ from your national culture on each dimension?
2. Cross-Cultural Awareness. Select a culture with which you have had contact. How does it differ from your own culture on Hofstede’s original four dimensions and on universalism/particularism? How might these differences show up in negotiations or ongoing busi- ness relationships?
3. Cultural Self-Identity. In which ways are you a product of the culture in which you grew up? How does your personal cultural back- ground affect your values, attitudes, thinking, and behavior? How does your cultural background make it easier for you to work inter- nationally? How does your cultural background hinder your effec- tiveness in working internationally?
4. Cross-Cultural Interpretation. Select a situation described in the international press involving two or more cultures. Analyze the situa- tion using Hofstede’s original four dimensions, plus the universalism/ particularism and task/relationship dimensions. How does your cul- tural analysis help to explain the situation? Given your understand- ing of the cultural similarities and differences, what would you rec- ommend each side do (or avoid doing) to resolve the situation?
5. Cross-Cultural Analysis and Action. Ask a colleague to describe a cross-cultural situation in which he or she is currently involved.
Analyze it from a cross-cultural perspective using any relevant dimen- sion discussed in Chapters 1 and 2. Based on your cross-cultural analysis, what would you recommend your colleague do? What would you recommend your colleague avoid doing? N OTES 1. Ken Dang, MBA, McGill University.
2. Reprinted with permission of M.E. Sharpe, Inc., Armonk, N.Y.
3. Hofstede (11) originally labeled this dimension as masculinity/femininity.
Since the dimension does not correspond with contemporary understand- ings of masculinity and femininity, however, Adler changed the labels to more accurately reflect their underlying meanings. It should be noted that Hofstede never intended to suggest that today’s male and female students or managers possess or lack certain attributes that would make one a better manager than the other.
4. Although there is large cultural variance among Arab-speaking and West African countries, due to a limited number of respondents, Hofstede 66 The Impact of Culture on Organizations combined Ghana, Nigeria and Sierra Leone into a composite West African score (WAF); Ethiopia, Kenya, Tanzania, and Zambia into a composite East African score (EAF); and Egypt, Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, and the United Arab Emirates into a composite score for Arab speaking countries (ARA).
5. Shigeki Iwashita, MBA, McGill University.
6. Jennifer Oakes, BCOMM, McGill University.
7. See Note 3.
8. Matts Franck, MBA, McGill University.
9. Hofstede (10:373) posits that national cultures differ primarily in their values, while organizational cultures differ mainly in their practices.
See Hofstede (10) for a chapter devoted to variance in organizational cultures. REFERENCES 1. Adler, N. J.; & Jelinek, S. “Is ‘Organization Culture’ Culture Bound?” Human Resource Management, vol. 25, no. 1 (1986), pp. 73–90.
2. Boyacigiller, Nayike; Kleinberg, M. Jill; Phillips, Margaret E.; & Sackman, Sonja. “Conceptualizing Culture” in B. J. Punnett & O.
Shenkar, eds., Handbook for International Management Research (Cambridge: Blackwell, 1996), pp. 157–208.
3. Burke, Warner, ed., “Special Issue on Organizational Culture,” Organizational Dynamics (Autumn 1983).
4. Child, John. “Culture, Contingency & Capitalism in the Cross- National Study of Organizations,” in L. L. Cummings & B. M.
Staw, eds., Research in Organizational Behavior, vol. 3 (Greenwich, Conn.: JAI Press, 1981), pp. 303–356.
5. Chinese Culture Connection. “Chinese Values and the Search for Culture-Free Dimensions of Culture,” Journal of Cross-Cultural Psychology, vol. 18, no. 2 (1987), pp. 143–164.
6. Earley, Christopher; & Gibson, Christina. “Taking Stock in Our Progress on Individualism/Collectivism: 100 Years of Solidarity and Community,” Journal of Management, vol. 24, no. 3 (1998), pp.
265–305.
7. Hall, Edward T. Beyond Culture. Copyright © 1976, 1981 by Edward T. Hall. Used by permission of Doubleday, a division of Bantam Doubleday Dell Publishing Group, Inc., New York.
8. Hampden-Turner, Charles. Charting the Corporate Mind(Oxford, England: Blackwell, 1991).
9. Hofstede, Geert. Cultures and Organizations: Software of the Mind (London: McGraw-Hill, 1991). How Cultural Differences Affect Organizations 67 10. Hofstede, Geert.Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, 2nd ed.
(Thousand Oaks, Calif.: Sage Publications, 2001).
11. Hofstede, Geert. Culture’s Consequences: International Differences in Work-Related Values (Beverly Hills, Calif.: Sage, 1980).
12. Hofstede, Geert. “Motivation, Leadership, and Organizations: Do American Theor ies Apply Abroad?” Organizational Dynamics (Summer 1980), pp. 42–63.
13. Hofstede, Geert; & Bond, Michael H. “The Confucius Connection: From Cultural Roots to Economic Growth,” Organizational Dynamics, vol. 16, no. 4 (1988), pp. 4–21.
14. Jelinek, Mariann; Smircich, Linda; & Hirsch, Paul, eds., “Organizational Culture” (Special Issue), Administrative Science Quarterly, vol. 28 (September 1983), p. 3.
15. Laurent, André. “The Cultural Diversity of Western Conceptions of Management,” International Studies of Management and Organization, vol. 13, no. 1–2 (1983), pp. 75–96.
16. Lubatkin, M.; Calori, R.; Very, Philippe; & Veiga, J. “Managing Mergers Across Borders: A Two-Nation Exploration of a Nationally Bound Administrative Heritage,” Organization Science, vol. 9, no. 6 (1998), pp. 670–684.
17. McGregor, Douglas M. The Human Side of Enterprise, 25th anniver- sary edition (New York: McGraw-Hill, 1985).
18. Muna, F. A. The Arab Executive (New York: Macmillan, 1980), Table 6.2.
19. Nasierowski, Wojcieck; & Mikula, Bogusz. “Culture Dimensions of Polish Managers: Hofstede’s Indices,” Organizational Studies,vol.
19, no. 3 (1998), pp. 495–509.
20. Schneider, Susan. “National vs. Corporate Culture: Implications for Human Resource Management,” Human Resource Management, vol. 27, no. 2 (1988), pp. 231–246.
21. Trompenaars, Fons; & Hampden-Turner, Charles. Riding the Waves of Culture: Understanding Cultural Diversity in Business, 2d ed. (New York: McGraw-Hill, 1998).
22. Uttal, B. “The Corporate Culture Vultures,” Fortune,vol. 108, no. 8 (1983), pp. 66–72.
68 The Impact of Culture on Organizations 69 Chapter 3 Communicating AcrossCultures If we seek to understand a people, we have to try to put our- selves, as far as we can, in that particular historical and cul- tural background....It is not easy for a person of one country to enter into the background of another country. So there is great irritation, because one fact that seems obvious to us is not immediately accepted by the other party or does not seem obvi- ous to him at all ....But that extreme irritation will go when we think . . . that he is just differently conditioned and simply can’t get out of that condition. One has to recognize that what- ever the future may hold, countries and people differ ...in their approach to life and their ways of living and thinking. In order to understand them, we have to understand their way of life and approach. If we wish to convince them, we have to use their language as far as we can, not language in the narrow sense of the word, but the language of the mind. That is one necessity. Something that goes even further than that is not the appeal to logic and reason, but some kind of emotional aware- ness of other people. —Jawaharlal Nehru, Visit to America All business activity involves communicating. Within global businesses, activities such as leading, motivating, negotiating, decision making, problem solving, and exchanging information and ideas are all based on the ability of managers and employees from one culture to communi- cate successfully with colleagues, clients, and suppliers from other cul- tures. Communicating effectively challenges managers even when they are working domestically with a culturally homogeneous workforce.
When colleagues speak a variety of languages and come from an array of cultural backgrounds, communicating effectively becomes consider- ably more difficult (13:3–5,121–128;18:1) . 70The Impact of Culture on Organizations COMMUNICATING CROSS-CULTURALLY Communication involves the exchange of meaning: it is my attempt to let you know what I mean. Communication includes any behavior another person perceives and interprets: it is your understanding of what I mean.
Communication inclu des sending both verbal messages (words) and nonverbal messages (tone of voice, facial expression, behavior, physical setting, etc.). It includes consciously sent messages as well as messages that the sender is totally unaware of having sent. Whatever I say and do, I can- not notcommunicate. Communication therefore involves a complex, multilayered, dynamic process through which we exchange meaning. Every communication has a message sender and a message receiver. As shown in Figure 3-1, the sent message is never identical to the received message. Why? Communication is not direct, but rather indirect; it is a symbolic behavior. I cannot communicate my ideas, feelings, or informa- tion directly; rather, I must externalize or symbolize them before they can be communicated. Encoding describes the producing of a symbol message.
Decoding describes the receiving of a meaning from a symbol message.
Message senders must encode their meaning into a form that the receiver will recognize; that is, into words and behavior. Receivers must then decode the words and behavior—the symbols—back into messages that have meaning for them.
FIGURE 3-1 Communicating Across Cultures Received Message Sent Message Message Sender from Culture A Message Receiver from Culture B Received Response Sent Response For example, because the Cantonese word for eight sounds like faat, which means prosperity, Hong Kong textile manufacturer Lau Ting-Pong paid $5 million for car registration number 8. A year later, a European millionaire paid $4.8 million at Hong Kong’s Lunar New Year auction for vehicle registration number 7, a decision that mystified the Chinese, since the number 7 has little significance in the Chinese calculation of fortune (17) .
Similarly, the members of Hong Kong’s prestigious Legislative C ouncil refrained from using numbers ending in 4 to identify their newly installed lockers. Some Chinese consider numbers ending with the digit 4 to be jinxed, because the sound of the Cantonese word sei is the same for four anddeath . The number 24, for instance, sounds like yee sei,or death-prone in Cantonese (12) .
The process of translating meanings into words and behaviors, that is, into symbols, and back again into meanings is based on a person’s cultural background and differs accordingly for each person. The greater the difference between senders’ and receivers’ backgrounds, the greater the difference in the meanings they attach to particular words and behaviors. For example:
A British boss asked a new, young American employee if he would like to have an early lunch at 11 A.M. each day. The employee answered, “Yeah, that would be great!” The boss, hearing the word yeah instead of the word yes, assumed that the employee was rude, ill-mannered, and disrespectful. The boss responded curtly, “With that kind of attitude, you may as well forget about lunch!” The employee was bewildered. What had gone wrong? In the process of encoding agreement (the intended meaning) by the employee into yeah (a word symbol) and then the boss’s decoding of that same sym- bol, the boss received a message entirely different from the message the employee had meant to send. Unfortunately, as is the case in most miscommunication, neither the sender nor the receiver was fully aware of what had gone wrong and why.
Cross-cultural communication occurs when a person from one cul- ture sends a message to a person from another culture. Cross-cultural miscommunication occurs when the person from the second culture does not receive the sender’s intended message. The greater the differ- ence between the sender’s and the receiver’s cultures, the greater is the chance for cross-cultural miscommunication. For example:
A Japanese businessman wants to signal his Norwegian client that he is uninterested in a particular sale. To be polite, the Japanese says, “That will be very difficult.” The Norwegian interprets Communicating Across Cultures 71 72The Impact of Culture on Organizations the statement to mean that unresolved problems remain, not that the deal is off. The Norwegian responds by asking how her com- pany can help solve the problems. The Japanese, believing he has sent a message indicating no sale, is mystified by the Norwegian’s response.
Communication does not necessarily result in understanding. Cross- cultural communication continually involves misunderstandings caused by misperception, misinterpretation, and misevaluation. When the sender of a message comes from one culture and the receiver from another, the chances of accurately transmitting the message are reduced. People from different countries see, interpret, and evaluate events differently, and consequently act upon them differently. In approaching cross-cultural situations, effective businesspeople therefore assume difference until similarity is proven. They recognize that all behavior makes sense from the perspective of the person behaving and that logic and rationale are culturally relative. In cross-cultural business situations, labeling others’ behavior as bizarre usually reflects culturally based misperception, misinterpretation, or misevaluation; rarely does the behavior reflect intentional malice or pathological motivation. See the Box “Culturally ‘Bizarre’ Behavior” for an example of culturally based misperception.
CULTURALLY “BIZARRE” BEHAVIOR Only in the Eyes of the Beholder 1 While in Bangkok’s notoriously congested traffic, a Canadian executive’s car was hit by a Thai motorist who had crossed over the double line while passin\ g another vehicle. After failing to establish that the fault lay with the Thai driver, the Canadian flagged down a policeman. After several minutes of seemingly futile discussion, the Canadian pointed to the double line in the middle of the road and asked \ the policeman directly, “What do these lines signify?” The policeman replied, “They indicate the center of the road and are there so I can establish just how far from the center the accident occurred.” The startled Canadian became silent. It had never occurred to him that the double line might not mean “no passing\ allowed.” Unwritten rules reflect a culture’s interpretation of its surroundings. A foreign columnist for the English-language Bangkok Post once proclaimed that the unwrit- ten traffic rule in Thailand is: “When there are more than three cars in front of you at a stop sign or intersection, start your own line!” This contravenes the Western stay-in-line ethic, of course, but it effectively portrays, albeit in slightly exaggerated fashion, a fairly consistent form of behavior at intersections in Thailand. And it drives non-Thais crazy! Communicating Across Cultures73 CROSS-CULTURAL MISPERCEPTION Do the French and the Chinese see the world in the same way? No. Do Venezuelans and Ghanaians see the world in the same way? Again, no. No two national groups see the world in exactly the same way. Perception is the process by which individuals select, organize, and evaluate stimuli from the external environment to provide meaningful experiences for themselves (4;15;18;22) . When Mexican children, for example, view simul- taneous tachistoscopic pictures of a bullfight and a baseball game, they generally only remember seeing the bullfight. Looking through the same tachistoscope, American children only remember seeing the base- ball game (5). Similarly, when researchers show adult card players altered playing cards, they fail to see what they don’t expect to see—in this case, that the hearts are black and the clubs are red. Why do the children not see both pictures? Why do the adults fail to correctly see the unexpected playing card colors? The answer lies in the nature of perception. Perceptual patterns are neither innate nor absolute. They are selective, learned, culturally determined, consistent, and inaccurate. •Perception is selective.At all times the environment contains too many stimuli for us to observe at one time. We therefore screen out most of what we see, hear, taste, and feel. We screen out the overload and allow only selected information through our per- ceptual filter to our conscious mind (6). •Perceptual patterns are learned.We are not born seeing the world in a particular way; rather, experience teaches us to perceive the world in specific ways.
•Perception is culturally determined .We learn to see the world in a particular way based on our cultural background.
•Perception is consistent.Once we see something in a particular way, we tend to continue to see it that way.
•Perception is inaccurate.We see things that do not exist and do not see things that do exist. Our background, values, interests, and culture act as filters and lead us to distort, block, and even create what we choose to see and to hear. We perceive what we expect to perceive. We perceive things according to what we have been trained to see, according to our cultural map.
For example, read the following sentence and quickly count the number of Fs: FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF YEARS. 74The Impact of Culture on Organizations Most people who do not speak English see all six Fs. By contrast, many English speakers only see three Fs; they do not see the Fs in the word of.
Why? Because people automatically revert to their habitual and natural behavior; that is, they do what they always do. People who can read English will automatically read the sentence (a natural behavior), even when asked to counttheFs (an unusual behavior). Because the word ofis not important for understanding the sentence’s meaning, they simply do not see either the ofs or the Fs in of. We selectively see those words that are important according to our cultural conditioning (in this case, our lin- guistic conditioning). Once we see a phenomenon in a particular way, we usually continue to see it in that way. Once we stop seeing ofs, we do not see them again (even when we look for them); we do not see things that do exist. One particularly astute manager at Canadian National Railways makes daily use of perceptual filters to her firm’s advantage. She gives reports written in English to bilingual Francophones to proofread and those written in French to bilingual Anglophones. She uses the fact that the native English-speakers “see” more errors—especially small errors—in French and native French-speakers “see” more errors in English. The distorting impact of perceptual filters causes us to see things that do not exist. In an executive development program, for example, U.S. exec- utives were asked to study the picture shown in Figure 3-2 and then to FIGURE 3-2 Perceptual Filters Change the Story Source: Rumor Clinic of the Anti-Defamation League. Reprinted by permission.
Projected picture from an experiment on the accuracy of communication from the Anti-Defamation League of the B’nai B’rith Rumor Clinic. 2 Communicating Across Cultures75 describe it to a second colleague who had not seen the picture. 2The second colleague then attempted to describe the picture to a third colleague who had not seen the picture, and so on. Finally, the fifth colleague described his perception of the picture to the group of executives and compared it with the original picture. Among the numerous distortions, the executives, similar to other groups, consistently described the black and the white man as fighting; the knife as being in the hand of the black man; the white man as wearing a business suit; and the black man as wearing laborer’s overalls. Clearly the stereotype of blacks (as poorer, work- ing class, and more likely to commit crimes) and of whites (as richer, upper class, and less likely to perpetrate violent crime) altered the observers’ perceptions, thus totally changing the meaning of the picture (3).
The executives’ personal and cultural experiences, and therefore their perceptual filters, allowed them to see things that did not exist and to miss seeing things that did exist. CROSS-CULTURAL MISINTERPRETATION Interpretation occurs when an individual assigns meaning to observa- tions and their relationships; it is the process of making sense out of perceptions. Interpretation organizes our experience to guide our behavior. Based on our experience, we make assumptions about what we perceive so we will not have to rediscover meanings each time we encounter similar situations. We make assumptions, for example, about how doors work, based on our experience of entering and leav- ing rooms; thus we do not have to relearn how to open a door each time we encounter a new door. Similarly, when we smell smoke, we generally assume it is the result of a fire. We do not have to stop and wonder if the smoke indicates a fire or a flood. Consistent patterns of interpretation help us to act appropriately and quickly within our day-to-day world.
CATEGORIES Because we are constantly bombarded with more stimuli than we can absorb and more perceptions than we can keep distinct or interpret, we only perceive those images that may be meaningful to us. We group perceived images into familiar categories that help us to simplify our environment, become the basis for our interpretations, and allow us to function in an otherwise overly complex world. As a driver approaching an intersection, for example, I may or may not notice the number of chil- dren in the back seat of the car next to me, but I will notice whether the traffic light is red or green (selective perception). If the light is red, I auto- matically place it in the category of all red traffic signals (categorization). This time, like prior times, I stop (behavior based on interpretation).
Although people are capable of distinguishing thousands of subtly differ- ent colors, I do not take time to notice if the red light in Istanbul is brighter or duller than the one in Singapore or more orange or purple than the one in Nairobi; I simply stop. Categorizing helps me to distinguish what is most important in my environment and to behave accordingly.Categories become counterproductive when we place people and things in the wrong groups. Cross-cultural miscategorization occurs when I use home-country categories to make sense of situations abroad. A Korean businessman, for example, entered a client’s office in Stockholm and encountered a woman sitting behind the desk.
Assuming she was a secretary, he announced that he wanted to see Mr. Silferbrand. The woman responded by saying that the secretary would be happy to help him. The Korean became confused. In assum- ing that most women work as secretaries rather than managers, he mis- interpreted the situation and acted inappropriately. His categorization made sense to him because most women in Korean offices are secre- taries, but it proved inaccurate and counterproductive here, because this particular Swedish woman was an executive, not a secretary.
STEREOTYPES Stereotyping involves a form of categorization that organizes our expe- rience and guides our behavior toward various groups within society.
Stereotypes never accurately describe individual behavior; rather, they describe the behavioral norm for members of a particular group (2;8) .
The Paris-based Intercultural Management Associates, for example, describes stereotypes of English and French businesspeople as follows:
We have found that for every set of negative stereotypes distinguishing the British and French there corresponds a particular values divergence that, when recognized, can prove an extraordinary resource. To illus- trate: The French, in describing the British as “perfidious,” “hypocriti- cal,” and “vague,” are in fact describing English ...[managers’] typical lack of a general model or theory and . . . their preference for a more pragmatic, evolutionary approach. This fact is hard for the French . . .
to believe, let alone accept as a viable alternative, until, working along- side one another, the French ...come to see that there is usually no ulte- rior motive behind ...English . . . [managers’] vagueness but rather a capacity to think aloud and adapt to circumstances. For [their] part, the English ...come to see that, far from being “distant,” “superior,” or “out of touch with reality,” ...[French managers’] concern for a gener- al model or theory is what lends vision, focus, and cohesion to an enter- prise or project, as well as leadership and much needed authority (9). 76 The Impact of Culture on Organizations Stereotypes, like other forms of categories, can be helpful or harm- ful depending on how we use them. Effective stereotyping allows peo- ple to understand and act appropriately in new situations. A stereotype becomes helpful when it is •Consciously held. People should be aware they are describing a group norm rather than the characteristics of a specific individual.
•Descriptive rather than evaluative .The stereotype should describe what people from this group will probably be like and not evaluate the people as good or bad.
•Accurate. The stereotype should accurately describe the norm for the group to which the person belongs.
•The first best guess about a group prior to acquiring information about the specific person or persons involved.
•Modified , based on continuing observation and experience with the actual people and situations.
Because we believe stereotypes reflect reality, subconsciously held stereotypes are difficult to modify or discard even after we acquire real information about a person. If a subconscious stereotype also inaccu- rately evaluates a person or situation, we are likely to maintain an inap- propriate, ineffective, and frequently harmful guide to reality. Assume, for example, that I subconsciously hold the stereotype that Anglophone Québecois 3refuse to learn French and therefore believe they should have no rights within the predominantly French-speaking province of Quebec (an inaccurate, evaluative stereotype). I then meet a monolin- gual Anglophone and say, “See, I told you that Anglophones aren’t willing to speak French! They don’t deserve to have rights here.” I next meet a bilingual Anglophone and conclude, “He must be an American because Canadian Anglophones always refuse to learn French.” Instead of questioning, modifying, or discarding my stereotype (“Some Anglophone Canadians speak French”), I alter reality to fit the stereo- type (“He must be American”). Stereotypes increase effectiveness only when used as a first best guess about a person or situation prior to acquiring direct information. Stereotypes never help when adhered to rigidly.
Indrei Ratiu (19) , in his work with INSEAD, a leading international business school in France, and the London Business School, found that managers identified as “most internationally effective” by their col- leagues altered their stereotypes to fit the actual people involved, whereas managers identified as “least internationally effective” maintained their stereotypes even in the face of contradictory information. For example, internationally effective managers, prior to their first visit to Germany, might consciously stereotype Germans as being extremely task oriented. Communicating Across Cultures 77 Upon arriving in Frankfurt and meeting a very friendly and lazy Herr Schmidt, they would alter their description to say that most Germans appear extremely task oriented, but Herr Schmidt seems friendly and lazy. Months later, the most internationally effective managers are only able to say that some Germans appear very task oriented, whereas oth- ers seem quite relationship oriented (friendly); it all depends on the person and the situation. In this instance, the highly effective managers use the stereotype as a first best guess about the group’s behavior prior to meeting any individuals from the group. As time goes on, they mod- ify or discard the stereotype entirely; information about a particular individual always supersedes the group stereotype. By contrast, the least internationally effective managers maintain their stereotypes. They would assume, for example, that the contradictory evidence in Herr Schmidt’s case represents an exception, and would continue to believe that Germans are highly task oriented. In drawing conclusions too quickly on the basis of insufficient information—premature closure (15) —their stereotypes become self-fulfilling (23) .
In his classic studies, Canadian psychologist Donald Taylor (6;24) found that most people maintain their stereotypes even in the face of contradictory evidence. Malcolm Gladwell, in his popular research- based book, Blink: The Power Of Thinking Without Thinking (9),demon- strated that people today continue to stereotype, often in the most complex, consequential, and stressful situations. Taylor, for example, asked English and French Canadians to listen to one of three tape recordings of a French Canadian describing himself. In the first version, the French Canadian used the Francophone stereotype and described himself as religious, proud, sensitive, and expressive. In the second ver- sion, he used neutral terms to describe himself. In the third version, he used terms to describe himself that contradicted the stereotype, such as not religious, humble, unexpressive, and conservative. After having listened to one of the three versions, each person was asked to describe the Francophone on the tape (not Francophones in general). Surprisingly, people who listened to each of the three versions used the same stereotyp- ic terms—religious, proud, sensitive, and expressive—even when the voice on the tape had conveyed the opposite information. People evidently maintain stereotypes even in the face of contradictory information.
Given that stereotyping is useful as an initial guide to reality, why do people malign it? Why do parents and teachers admonish children not to stereotype? Why do sophisticated managers rarely admit to stereo- typing, even though each of us stereotypes every day? The answer is that we have failed to accept stereotyping as a natural process and have con- sequently failed to learn to use it to our advantage. For years we have viewed stereotyping as a form of primitive thinking, as an unnecessary 78 The Impact of Culture on Organizations simplification of reality. We have also viewed stereotyping as unethical:
stereotypes can be inappropriate judgments of individuals based on inaccurate descriptions of groups. It is true that labeling people from a certain ethnic group as “bad” is not ethical, but grouping individuals into categories is neither good nor bad—it simply reduces complexity to manageable proportions. Negative views of stereotyping simply cloud our ability to understand people’s actual behavior and impair our awareness of our own stereotypes.Everyone stereotypes. Rather than pretending not to stereotype, effective global managers need to become aware of their cultural stereotypes and learn to set them aside when faced with contradictory evidence. In conclusion, some people stereotype effectively and others do not. Stereotyping becomes counterproductive when we place people in the wrong group, when we incorrectly describe group norms, when we evaluate the group rather than simply describing it, when we con- fuse the stereotype with the description of a particular individual, and when we fail to modify the stereotype based on our actual observa- tions and experience.
SOURCES OF MISINTERPRETATION Misinterpretation can be caused by inaccurately perceiving a person or situation. It can be caused by inaccurately interpreting what is seen; that is, by using my meanings to make sense out of your reality. An example of this type of misinterpretation (or misattribution) is reflected in the following encounter between an Austrian and a North American businessperson.
I meet an Austrian client for the sixth time in as many months. He greets me as Herr Smith. Using my North American perspective, I interpret his very formal greeting as a warning that he either dislikes me or is uninterested in developing a closer business relationship with me. However, I have misinterpreted the situation. I have inappro- priately used the norms for North American business behavior, which are more informal and demonstrative (by the sixth meeting, I would say “Good morning, Fritz,” not “Good morning, Herr Ranschburg”), to interpret the Austrian’s more formal behavior (“Good morning, Herr Smith”). Based on a North American inter- pretation, businesspeople would only maintain formal behavior after the first few meetings if they either disliked or distrusted their associates. Such misinterpretation could jeopardize both the busi- ness transaction and the relationship.
Culture strongly influences, and in many situations determines, how we interpret situations. Our cultural background determines both the Communicating Across Cultures 79 categories we use and the meanings we attach to them. Sources of cross- cultural misinterpretation include subconscious cultural “blinders,” a lack of cultural self-awareness, projected similarity, and parochialism.
Subconscious Cultural BlindersBecause most interpretation goes on at a subconscious level, we are often unaware of the assumptions we make and their cultural basis. Our home-culture reality never forces us to examine our assumptions or the extent to which they are culturally based, because we share them with most other citizens of our country.
All we know is that things do not work as smoothly or logically when we work outside our own culture as when we work with people more similar to ourselves. For example:
Canadians conducting business in Kuwait were surprised when their meeting with a high-ranking official was not held in a closed office and was constantly interrupted. Using Canadian-based cultural assumptions—that impor tant people have large private offices with sec- retaries monitoring the flow of people into the office, and because impor- tant business takes precedence over less important business, it is not interrupted—the Canadians interpreted the Kuwaiti’s open office and constant interruptions to mean that the official was neither as high ranking nor as interested in conducting business with them as they had previously thought. The Canadians’ misinterpretation of the Kuwaiti’s office environment led them to lose interest in working with the Kuwaiti.
The problem is that the Canadians’ interpretation derives from their own North American cultural norms, not from the norms of Middle Eastern culture. The Kuwaiti may well have been a high-ranking official who was very interested in doing business. The Canadians will never know. Cases of subconscious cross-cultural misinterpretation occur fre- quently. In the 1980s, for example, a Soviet Russian poet, after lecturing at U.S. universities for two months, observed that “Attempts to please an American audience are doomed in advance, because out of twenty lis- teners five may hold one point of view, seven another, and eight may have none at all” (2). The Soviet poet confused Americans’ freedom of thought and speech with his ability to please them. He assumed that one can only please an audience if all members hold the same opinion.
Another example of well-meant misinterpretation comes from the U.S.
Office of Education’s advice to U.S. teachers working with newly arrived Vietnamese refugee students (25) :
Students’ participation was discouraged in Vietnamese schools by lib- eral doses of corporal punishment, and students were conditioned to sit rigidly and speak out only when spoken to. This background . . . makes 80The Impact of Culture on Organizations Communicating Across Cultures81 speaking freely in class hard for a Vietnamese student. Therefore, don’t mistake shyness for apathy.
Perhaps the extent to which this interpretation is culturally based becomes clearer when we imagine the opposite advice that the Vietnamese Ministry of Education might have given to Vietnamese teachers planning to instruct American children for the first time:
Students’ proper respect for teachers was discouraged by a loose order and students were conditioned to chat all the time and to behave in other disorderly ways. This background makes proper and respectful behavior in class hard for an American student. Therefore, do not mistake rudeness for lack of reverence.
Lack of Cultural Self-Awareness Although we may think that the biggest obstacle to conducting business around the world is under- standing foreigners, the greater difficulty actually involves becoming aware of our own cultural conditioning. As anthropologist Edward Hall explains, “What is known least well, and is therefore in the poorest posi- tion to be studied, is what is closest to oneself ” (11:45) . We are generally least aware of our own cultural characteristics and express surprise when we hear foreigners describe us. Many Americans, for example, are surprised to discover that foreigners see them as hurried, overly law- abiding, very hard working, extremely explicit, and overly inquisitive (see the box “Cross-Cultural Awareness: Americans as Others See Them”). Many American businesspeople were equally surprised by a Newsweek survey reporting the characteristics most and least frequent- ly associated with them (see Table 3-1). Asking foreigners to describe businesspeople from your country is a powerful way to see yourself as others see you.
Another revealing way to understand the norms and values of a culture is to listen to their common sayings and proverbs. What does a society encourage, and what does it prohibit? The box on page 84, “North American Values: Proverbs,” lists some common North American proverbs and the values each teaches.
To the extent that we can begin to see ourselves through the eyes of people from other cultures, we can begin to modify our behavior, emphasizing our most appropriate and effective characteristics and minimizing those that are least helpful. The more culturally self-aware we are, the more able we are to predict the effect our behavior will have on others.
Projected Similarity Projected similarity refers to the assumption that people are more similar to you than they actually are or that 82The Impact of Culture on Organizations Table 3-1 How Others See Americans Characteristics Most Commonly Associated with Americans* Western Great France Japan Germany Britain Brazil Mexico Industrious Nationalistic Energetic Friendly Intelligent Industrious Energetic Friendly Inventive Self-indulgent Inventive Intelligent In