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TU-53.309 Cross-cultural management
Implications of culture on organizations, management
and leadership
31.10.2002
Stina Immonen
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Content Advancements of cross-cultural
management studies from the viewpoint of OB
Impact of cross-cultural issues on organizations, teams and individuals
Research conducted at HUT DIEM
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Advancements in CCM research
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Trends in studies on international organizational behavior (Adler & Bartholomew 1992)
Focus has shifted from single country and comparative research to studies on international interaction
Impact of culture on managerial behavior has been recognized
Academics and professionals generate together knowledge relevant to global business
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Trend one: The shift to interaction 1/2
Evolution phases of multinational enterprises
domestic firms cross-cultural management is of minimal interest
multi-domestic firms growing to international markets polycentric or regiocentric expansion through developing
structures competition in each national market need for comparative understanding of cultural
differences
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Trend one: The shift to interaction 2/2
multi-national firms globally integrating geographically dispersed operations (multiple
foreign subsidiaries) minimizing the impact of cultural diversity assimilation of cultures into one dominant organizational culture comparative and international interaction research needed
transnational firms developing and diffusing innovations strategic alliances and partnerships local responsiveness and global integration using cultural synergy as an advantage cross-cultural interaction research
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Trend two: The recognition of culture’s importance 1/2
Multi-domestic and multinational phases have emphasized cultural influence by the dominant partner
=> managers’ behavior was becoming more similar (convergence) supported by hierarchies and organizational structures
Transnational phase emphasizes networks of equal status players and minimal national cultural dominance in the relationships=> managers’ behavior maintains its dissimilarities (divergence)
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Trend two: The recognition of culture’s importance 2/2
How do managers learn from each other as equals?
collaborative learning rather than influence, compromise and adaptation
Understanding and managing human dynamics of global firms
continuous international interaction within and between firms as networks of equals
collaboration and learning of people from different cultures
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Trend three: The academic/ professional community discourse
Interaction between academic and professional communities stimulates relevant research
International OB/HRM articles
Shortens the “cycle time” between changes in firms’ competitive environment and changes in scholars’ conceptualizations
just-in-time research
Creates a larger body of knowledge of international organizational behavior
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Conclusions Advancements in international business
Interaction between researchers and practionnaires
Increased need of knowledge
have developed CCM research
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Approaches to study cross-cultural management
Foreign national, one country approach understanding national cultures
Comparative international, two or more countries understanding differences between cultures
International interaction, interaction within and between organizations that have members from two or more countries understanding the synergy of cultures
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Impact of cross-cultural issues on organizations
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Cross-cultural issues on organizational level
Organizational structure and design stage of internationalization and view
of proper management method of control and coordination international human resource
management
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Stages of internationalization (Dowling et al. 1999)
Parent-subsidiary companies direct control – parent-country nationals as managers
International division ethnocentric approach with local expertise – host-country
nationals as managers Global division
centralization - decentralization Matrix
joint authority of geographical and product divisions, matching the structure to the decision-making
Heterarchy, transnationals, networks less focus on the structure, more focus on developing the
abilities, behavior and performance of individual managers
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Method of control in multinational enterprises (Marchan et al. 1996)
Formal Structure Reporting systems Budgets Performance targets
Informal Personal relationships Corporate culture
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International human resource management – three dimensions (Dowling et al. 1999, Morgan 1986)
Human resource activities Human resource planning, staffing,
performance management, training and development, compensation and benefits, labor relations
Countries of operations Host country, home country, other country
Types of employees HCNs, PCNs, TCNs
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Models of culture e.g.
Hofstede’s model (1980, 1997) power distance collectivism-individualism uncertainty avoidance masculinity-femininity
Hall (1976, 1981): High and low context communication
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have been used in explaining differences in
organizational structures decision-making processes manager-subordinate relations commitment to organization etc.
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Examples of cultural classifications and their influences on management (Rodrigues, 1996)
Large power distance
Small power distance
Collectivism
Individualism
Authoritative decision-making and leadership styles
Participative and consultative styles
Reliance on informal controls, team approach
Reliance on formal controls
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Strong uncertainty avoidance
Weak uncertainty avoidance
Masculinity
Femininity
Mechanistic organization
Organic organizational structures
Equal employment opportunities maybe resisted by males
Equal employment opportunities less resisted
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High-context cultures (e.g. Chinese, Korean, Japanese, Vietnamese, Arab, Greek, Spanish culture)
Low-context cultures (e.g. Italian, English, North American, Scandinavian, Swiss, German culture)
Business transactions and negotiations are slow in pace
Business transactions and negotiations are fast in pace
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Cross-cultural issues on team level
Teams communication leadership
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Multi-cultural teams
Definition team members are from more than one national
culture often members represent different organizational/
professional cultures Communication
”more to do with realizing right responses than sending the ”right” messages” – cultural awareness and language to use the verbal and non verbal symbols
e.g speed of messages, context, information flow, importance of completion differ accross cultures (Hall & Hall 1989)
attitude towards conflict and risk
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Multi-cultural teams
Leadership ”rather to apply different leadership styles than
to try to find synergy between different national cultures” (Mäkilouko, 2001)
aims to strengthen motivation and commitment to organization
relationship oriented leadership task oriented leadership
degree of empowerment, participation in decision-making
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Group Efficiency
Time
Immature Group- Forming
* confusion* uncertainty* assessingsituation* testing groundrules* feeling outothers* defining goals* getting acquainted* establishingrules
Fractionated Group
- Storming
Sharing Group- Norming
Effective Group- Performing
Disbanding Group
- Adjourning
* disagreementover rules* struggle forleadership* tension* hostility* cliqueformation
* consensus* leadershipaccepted* trustestablished* standards set* new stable rules* co-operation
* successful performance* flexible task roles* openness
* helpfulness* delusion,
desillusion, acceptance
* disagreement* anxiety aboutseparation andending* positive feeling towardsleader* sadness* self-evaluation
Stages of Team Development Cycle
Adapted from Tuckman (1965), Katzenbach & Smith (1993), Montebello (1994) and Jassawal & Sashittal (1999)
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MC, CF team success factors from AIRBUS case
Forming Storming Norming Performing Adjourning
TEAM LIFE CYCLE
Team Development Process
Increased communication and interaction, setting up goals
Understanding of constraints, motivations and interests, defining responsibilities and roles, shared or individualised leadership depending on task
Trust, transparent decisions and actions, agreed rules and performance measurement
Effective utilisation of skills, reviewing and rewarding, integration with other teams
Evaluation, closing ceremonies, disseminating learning experiences
Team Qualifications
Social skills and knowledge of languages
Tolerance towards diversity, negotiation skills
Tolerance towards uncertainty, reliance towards others
Commitment to team, ability to collaborate for synergy
Willingness to learn from team experience, and improve performance
IT Support Needed
Network, compatible information systems and software
Effective use of communication media
Performance management and monitoring systems
Data archives for future needs, knowledge management system for organisational/ project memory
Experiences from the team experiment
Formal policies for team member recruiting and replacement should be developed
Teamwork training should be provided
Communication strategies and standards must be mutually agreed between all partners
Support from team leader and from partner organisations
Closing meeting and evaluation should be arranged
Coherency in IT supported communication
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Cross-cultural issues on individual level
Individuals expatriation process inpatriation process repatriation process
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Expatriate performance Selection: technical skills, cross-cultural
suitability, family requirements, country-cultural requirements, language, MNE requirements
Predeparture training program Compensation package Task roles and duration of assignment Headquarter’s support: employee contract and
support to family Host environment: phase of internationalization,
emergent market or mature operation Cultural adjustment: “the U-curve”
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Inpatriation
Host country nationals’ transfers to parent country Breaking down the uniculture Influx of inpatriates helps employee
identification with worldwide organization Selection as expatriates Facilitating subsidiary learning and
integration Predeparture training programs
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Repatriation process
Returning to parent country preparation for repatriation (often negleted!) physical relocation and transition –
personalized assistance and support from parent company
readjustment career anxiety devaluing the international experience coping with new role demands: crossing corporate
boundary loss of status and pay
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Conclusion Cross-cultural awareness is needed
in managing internationalization process on organizational level
in managing team processes
on individual level
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CCM research at HUT DIEM
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Examples on cross-cultural management research at HUT DIEM
Research themes Culture’s impact on experienced employee
well-being (Järvenpää et al. 1993, 1997, Järvenpää & Immonen, 1996)
comparison of experienced job content and job stress between Finnish and US office workers, 1992-93
impact of organizational and national culture on management practices and organizational design, 1995-96, Finnish and US public and private sector
CCM understanding on occupational group, organizational and industry level by comparative studies; surveys
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Examples on cross-cultural management research at HUT DIEM
Research themes Culture’s impact on managerial behavior
(Immonen et al. 1994, Hyttinen & Immonen, 1994, Järvenpää & Immonen, 1996) comparison of US and Finnish managers on time
spent on interaction, 1993-94
CCM understanding on amount of interaction in managers’ work.
Units of analysis: type of work and organizationComparative studies: structured observation
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Examples on cross-cultural management research at HUT DIEM
Research themes Management of networked organizations
(Immonen & Järvenpää, 1998, Pinson et al. 2000, Thomas et al. 2000) organization culture and leadership in networked
electronics industry, 1998-99 cross-cultural challenges of de-located product
development, 1998-2000
CCM understanding on geographically dispersed operations and global integration
Case study approach; documentation, surveys, interviews, site visits
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Examples on cross-cultural management research at HUT DIEM
Research themes Challenges of international interaction on
global business, organizational and individual level, 2001- (Teerikangas et.al 2001, Järvenpää & Immonen, 2002) Finnish experiences from joint ventures and
acquisitions in Japan and China managing global virtual teams managing “born-global” companies
CCM understanding on global business and transnational company level by case studies; documentation, interviews, site visits
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References Adler, N. & Bartholomew, S. (1992) Academic and professional communities of discourse:
Generating knowledge on transnational human resource management. Journal of International Business Studies, 23:3, 551-569
Carayon, P. and Järvenpää, E., (2001) Cross-cultural factors in macroergonomics. In W. Karwowski (Ed.) International Encyclopedia of Ergonomics and Human Factors. Taylor and Francis, Florence, Inc., pp. 1205-1209.
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Dowling, P., Welch, D. & Schuler, R. (1999) International human resource management. Managing people in a multinational context. Toronto: South-Western College Publishing.
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Immonen, S. & Järvenpää, E. (1998) Building Network Organizations - Implications for Organizational Culture and Leadership. In P. Vink, E.A.P. Koningsveld & S. Dhondt (Eds.) Human Factors in Organizational Design and Management VI. Elsevier: Amsterdam, 27-32.
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References Järvenpää, E., Carayon, P., Derjami-Bayeh, A., (1997) The fit between national and organizational
cultures from the employee point of view (L'adéquation entre les cultures nationales et organisationnelles vue par les employés). In Industrial Engineering in a world without borders. 2ème Congrès International Franco-Québécois. September 3-5 1997. Albi, France: Ecole des Mines d’Albi.
Järvenpää, E. & Immonen, S. (1996) Cross-cultural aspects in job stress and managerial behavior. In W. Hacker, P. Richter, & T. Wagner (toim.) Analysis and design of mental work. Dresden: Dresden University of Technology, 1-10.
Järvenpää, E. & Immonen, S. (2002) Challenges of cross-cultural management: Case studies in Finnish companies. A paper accepted to be published in Proceedings of the Project Management Global Conference, Hong Kong, March 11-16, 2002.
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Morgan, P. (1986) International human resource management. Fact or Fiction. Personnel Administrator, 31,9,43-47
Pinson, L., Immonen, S. & Ylitalo, J. (2000) Description of a team life cycle. MUSCLES Technical Document. Task 2.4.3 http://www.avions.aerospatiale.fr/muscles/anglais/DELIVERABLES/2-4-3%20Description%20of%20team%20life%20cycle_vB.pdf
Mäkilouko, M. (2001) Leading multinational project teams: Forman, country specific perspective. Dissertation. Tampere University of Technology Publications 343.
Rodrigues, C. (1998) Cultural classification of societies and how the affect cross-cultural management. Cross Cultural Management. 5:3, 29-39.
Teerikangas, S., Riekkinen, V., Järvenpää, E. and Immonen, S., (2001) The impact of culture on Finnish project business: case of a Sino-Finnish joint venture. A paper presented at the 6 th Workshop in international business at the University of Vaasa, Finland, August 26-28, 2001.
Thomas, H., Carver, E., Harmer, S., Immonen, S. & Bröcker A. (2000) Models for analysing human resources and organisation. MUSCLES Technical Document. Task 2.1.4. http://www.avions.aerospatiale.fr/muscles/anglais/DELIVERABLES/2.1.4%20humanresources_vB.pdf
Tuckman, B.W. & Jensen, M.A.C. (1977) Stages of Small Group Development Revisited. Group and Organisational Studies, 2, pp. 419-427.