Chapter 7

ORGANIZATIONAL
CULTURES AND
DIVERSITY
Irwin/McGraw-Hill McGraw-Hill Companies, Inc., 2000
Chapter 2
THE NON ECONOMIC
ENVIRONMENT FOR
INTERNATIONAL MANAGEMENT

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 Definition and Characteristics
Organizational Culture: Observed behavioral
regularities, as typified by common language,
terminology, and rituals
Norms
amount of work to be done

degree of cooperation between management and

employees
Dominant values that the organization advocates
high product and service quality

low absenteeism

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 Organizational Culture Continued

A philosophy regarding how employees and

customers should be treated
Rules that dictate the dos and donts of employee
behavior relating to:
productivity

customer relations

Organizational climate
How participants interact with

each other, conduct

themselves with customers

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 Organizational Cultures in MNCs
Aspects in determining MNC organizational
culture:
The relationship between the employees and their organization
The hierarchical system of authority that defines the roles of
managers and subordinates
The general views that employees hold about the MNCs purpose,
destiny, goals, and their places in them
4 types of organizational cultures:
Family
Eiffel Tower
Guided Missile
Incubator

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 Organizational Cultures
Equity

Fulfillment-oriented Project-oriented
culture culture

INCUBATOR GUIDED MISSILE

Person Task

FAMILY EIFFEL TOWER

Power-oriented Role-oriented
culture culture
Hierarchy
Irwin/McGraw-Hill McGraw-Hill Companies, Inc., 2000 7-6
 Family Culture
Strong emphasis on the hierarchy
and orientation to the person

headed by a leader who is regarded as a caring parent

personnel look to leaders for both guidance and approval in
exchange for looking after them
characterized by traditions, customs, and associations that bind
together the personnel
and make it difficult for outsiders to become members
EX.) Turkey, Venezuela, China, and Singapore

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 Eiffel Tower Culture
Strong emphasis on the hierarchy and
orientation to the task -- impersonal and
efficient
Jobs are well defined
everything is coordinated from the top.
Person holding top position could be replaced at any time
without having an effect on the work being done
assessment centers, appraisal systems, training and
development programs, and job rotation are common in
managing human resources.
Ex.) North American and Northwest European countries

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 Guided Missile Culture
Strong emphasis on equality in the work
place and orientation to the task
Teams and project groups are common
Formal hierarchical considerations are given low priority
and individual expertise is of greater importance
360-degree feedback systems are common
Change comes quickly
Ex.) United States and United Kingdom

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 Incubator Culture
Strong emphasis on equality and personal
orientation
based on the concept that organizations are secondary to the
fulfillment of the individuals within them
Little formal structure -- participants are there to perform roles
This culture is composed of creative work teams
Change is fast and spontaneous
Leadership is achieved, not gained by position
Ex.) entrepreneurial companies

Irwin/McGraw-Hill McGraw-Hill Companies, Inc., 2000 7-10

 Managing Multiculturalism and
Diversity
Phasesof Multicultural
Development
Phase I - Domestic corporations
Phase II - International corporations
Phase III - Multinational corporations
Phase IV - Global corporations

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 Types of Multiculturalism
Domestic Multiculturalism
Group Multiculturalism
Homogeneous groups

Token groups

Bicultural groups

Multicultural groups

Potential Problems Associated with Diversity

Mistrust of others
Perceptions and preconceived stereotypes
Inaccurate biases
Miscommunication (misunderstandings & different uses of
time)

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 Advantages of Diversity

Generation of more and better

ideas
Prevents groupthink
Culturally diverse groups can
enhance creativity, lead to better
decisions, and result in more
effective and productive
performance

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 Using the Proper Guidelines
1. Team members must be selected for their task-related
abilities and not solely based on ethnicity --
- Routine Task - want homogeneity
. Innovative task - want multiculturalism

2. Team members must recognize and be prepared to

deal with their differences --
. recognize their own stereotypes
3. diverse teams tend to have more difficulty agreeing on
their purpose and task than members of homogenous
groups
. the team leader must help the group to identify and
define its overall goal

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 4. Members must have equal power so
that everyone can participate in the
process

5. all members have mutual respect for

each other

6. Managers must give positive

feedback on processes and output

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