Understanding of Cultural Divergence for Creating Cultural Convergence of Innovation

– A Case Reflection throughout an Innovation Focused Enterprise Development Project

Hong Wu

Høgskolen i Østfold, avdeling for ingeniørfag

Abstract

Researchers argued innovation focused enterprise development is a process of complex interactions

with a company internally and externally, associated with many actors and key elements, such as

contractors, academia, competitors, partners, networks, etc. The interactions between these actors

and processes driven by key elements usually have far more complicated implications beyond the

formal structures and borders of each company, and are therefore considered no longer as purely

internal or mechanical matters. One of the crucial issues is understanding of cultural divergence on

these actors, whom all have their own cultures, reflecting by attitudes and values. An innovation

culture, usually representing convergence of actors, will not easily created unless the issues of

cultural divergence has been addressed and discussed.

This paper is writing about cultural divergence of involved actors for a research project, cased by an

innovation focused enterprise development process within and around a particular business

company in Southeast Norway. The project is a part of large research program for regional

innovation development (VRI) of Norway, funded by Research Council of Norway (NFR) and the

regional government. The VRI program intends to creating innovation activities throughout

collaboration between the key actors, thus research institutions, business communities and regional

governments, and for this particular case, a research team, the enterprise management, the

production unit and employees. The research team uses an action research approach, thus analysis

and observation combined with action initiative and a process related research stay in the case

enterprise.

One of interesting observations, throughout the action initiative and the process of the research stay,

is highly cultural divergence for the actors, that appear to be a major obstacles and critical element

for the project progress. The analysis and process reflection suggest mutual understanding and

spending time for getting familiar with involved actors are unavoidable steps for successfully

project conducting.

Key words: Cultural divergence, enterprise development project, innovation activities, cultural

convergence.

Regional innovation focused enterprise development

The Scandinavian management thought with the Norwegian industrial democratic approaches has

been a debate issue for many scholars, argued for and against. The international researchers,

through their own case-studies and analysis, argued for or argued against, the industrial democratic

approaches and applications in organization development process upon different aspects, for

instance, optimum balance of power between managers and employees depends on circumstances

(C. Orpen, 1977) argued for diversifying of industrial democratic applications in different actors

and locations in favor of power balancing. Other researchers for example Pinyo Rattanaphan (2010)

argued for appreciative inquiry, coaching and knowledge management as organization development

interventions implemented in favor of organizational learning. It seems there is no unique model

that covers all the aspects of organizational behaviors, but the practical observations have own

counts case-by-case.

The current study intends to analyze the implementation innovation process through the Norwegian

industrial democratic approaches into a small and private business company. The analysis focuses

on a cultural aspect, thus the cultures of different groups in the organization. The case company was

sampled from their participating in a larger research program in collaborating with regional

government, research foundation and few other business companies in the related business

communities.

The program was called VS2010, later VRI (Value stimulating Regional Innovation) and it was

engaged to help improve the culture and climate of cooperation at the cased enterprises. The project

would seek to streamline the production and simultaneously initiate the desired development of the

organization. Action research approaches are introduced as the major research tools and the

Norwegian industrial democratic approaches are used as basic theoretical references.

The case company that researcher team works with

The current study was cased within a small and private business company, Southeast of Norway and

the company is producing packaged beverage in few modern and automatic production lines. The

major characterized nature of this business is a process industrial related in a high volume and

automation based planet. The competition in the market is high and there are few competitors all

with high volume but little profit margin so the key survival element is efficiency on the production.

There is therefore always requirement for increasing efficiency from the top leadership, while there

is limit space for none-direct profit related project such as introducing of the Norwegian industrial

democracy approaches.

The company was the one of the first few companies that jointed the VRI research program and yet

it is also one of only fewer companies are still participating in the program. Though the company

was not observed as a typical implementing arena for the Norwegian industrial democracy, based on

early stage observations, summarized as:

The first dialog conference was conducting in 2005, but there is no significant improvement

or following process observed (according to researcher team's notice)

There is a trade union club for the employee, but no driven force and real function in

practice issues and no meetings and actions

There is a clear and relatively large distinction, both physical and metal/attitudes, between

the employers and employees, as both parts are not in the same location and not seeing each other

daily.

The project at the case company initiated in 2005 and it was meant to be approached and researched

similar methods used as other VRI research projects and case companies, most of them belong to

package industries or subcontractors in the region. The essential goal was to improve the company’s

productivity through the Norwegian industrial democracy approach, including several implementing

methods, as dialog conference and resource grouping, particularly through better cooperation

between production workers and management, and more decision involvement from the workers.

The project was defined as a single company focused action research project, under the category of

company research project on VRI research program.

However, the real situation appeared after the project initiation seemed to be anything else than

what research team expected for Norwegian industrial democracy outcomes. There has been

introduced and applied classic industrial democracy practices or methods, experienced from other

case companies such as dialog conferences for whole staff, formal project meetings with top

company leaders and union representatives, even project information meetings with operators and

production workers to motivate their engagement to this project. Despite of these actions, the

management seemed not being directly interested in the industrial democracy approach and

production workers were not engaged neither. The direct industrial democracy approach seems not

to be a very attractive optional for the case company. The research team has debated many times

over the validity of this case project and necessity of letting the company taking part in the VRI

research program or drop off this case. However, there are the contra-dictionary events to be

observed and relevant issues for this project to be debated:

The project has been “survived”, thus engaged in, almost longest compared with other VRI

company projects, indicating the interests of participating from the company

The productivity and efficiency has been increased significantly nearly 20% during the

project period, succeeded what industrial democracy intended to reach for

There have been significantly attitudes changes after 5 years in VRI project, both among the

production workers and management regarding industrial democracy importance and applications.

Though the formal industrial democracy approaches seem not to be the best option for this case

company, there has always been a process and pushing for industrial democracy applications in the

company. The alternative approaches as informal industrial democracy process has been

experimented and evaluated during the project period. A few observations and reflections are

noticed and these data materials might lead us into the research questions in terms of industrial

democracy applications, alternative solutions and reflections.

When initially the researcher team entered the case company, there was an intention to build up an

organizational culture of industrial democracy. The researcher team designed a quite detailed plan

to implement a cultural changing process, starting with company's quantitative goals such as a

project for increase the efficiency of the plant further by 20%. The main activities are well defined

as implement development initiatives that are underway, participate in industry-oriented college

commitment.

The initial research questions asked by the researcher team

The research focus at this stage was examining on the interaction between actors in the enterprise

development project, such as how established practices and processes that are associated with this

interaction. Which actors and alliances are key to the creation of enterprise development projects?

What are the regional effects we see from business project? What processes are central to

understanding the interaction between actors and structures in the projects?

In 2006, the company renewed one of the productions with completely new machine equipment and

the installation project and following process became interesting research objects. The research

team initiated a face-to-face interview based survey on respondents from management and

production. Few conference papers were written on basis of the data interpretation and analysis.

One of these was a technology transferring sounded issue, indicating the necessity of time spending

and resource budgeting for successful technology transferring, such as competence upgrading,

training and simply getting used to the new machine and production line. The description below

was rendering from the analysis on the survey in 2006.

Reflecting and grouping the survey informants is a further and concrete step to question or verify

the crucial point in technology transfer, in this case, new installation of machine on the production

line. As introduced early: The ability to use the technology depends according to Levin (1997) on

mangers’ and workers’ understanding of what knowledge is built into the machines and tools and to

achieve necessary skills and motivation to operate it efficient. This is the crucial point in technology

transfer.

There are totally 8 respondents to be interviewed, whereof 1 from management and rest 7 are from

plant production lines. The analysis of interview materials has been focused on mangers’ and

workers’ understanding of what knowledge is built into the machines and tools and to achieve

necessary skills and motivation to operate it efficient. The organization of data materials are

following the 4 sections of the interview guide, as backgrounds (9 questions), initiation of this

technology transferring project (8 questions), organizing and managing the project (17 questions)

and organization’s adaptation for this technology transferring (13 questions).

All the informants are introduced into the survey and informed about the background of the case:

Installation of a new Technology in a juice producer plant. The backgrounds of the project was a

reorganization and outsourcing process at an earlier competitor, now customer and partner. The

actor at the end of comment citation indicating their representing or department in the organization.

The background of the new installation project

“A big project initiated by a direct inquiry from company A December 2005 on outsourced

production capacity.” Production. The project was important because of the increase in production

volume and the opportunities implied. With cost of production equipment, supplies and industrial

commodities at the same level in the market productive capacity and efficiency factor is the main

competitive edge.

“We could have rejected the deal, but then we would have no added value and economic growth in

the company. The deal gives us opportunities in the increased volumes produced.” Management. It

was an ambitious project with a time horizon close to impossible. From the signed contract to

production start on the new production line we are talking about four months, to meet the needs in

the marked

“I doubted if it was possible – everything had to be done inside a very short time limit.”

Management. The by far most important partner in the project was the processing and packaging

solution company delivering this new production line. They were responsible for the technical

solutions, installations and in-house training. A critical point would be to by a new production line

in time.

Initiation of this technology transfer project

As written earlier the background of the project was a reorganization and outsourcing process at an

earlier competitor, now customer and partner. It was also an ambitious project with a very short

time horizon. To make this a mission possible resources and priority were given the project.

“It was a priority project.” Management. The project took place in a small company with a

workforce of less than 20. The organization of the project and who to be involved were in many

aspects given in this scenario; including the head of the laboratory, the production manager, market

manager and managing director. The empirical material shows that

“A small organization and given who to participate in the project.” Management. The informal and

flat organization model is emphasized among all the subjects and assessed as both strength and a

possible problem for the company.

“The process took three months. Flat organization model. Fast decision-making process but also a

possible problem when owners dominate the management and the company.” Management. The

employee representative and the employees were informed just days after the formal agreement

were signed, but not involved in the actual decision making or design processes.

“The employee representative was oriented about the project the day after the agreement.”

Production

Organizing and managing the project

Once the contract has been signed, there was an information meeting for employees and local trade

union was also informed about the project. There were also followed by a number of activities to

initiate the project. As survey informants commented, there have been assigned project groups both

for commercial and technical issues, and the production managers also could initiate the project

with relative short notice. Though there seemed to be no tradition to involve the employees into the

project in an early, this has also been accepted both by management and production personnel. The

following citations illustrated the mentioned summary.

• “There has been assigned two project groups, one for commercial and another for technical

issues” Management

• “The company has a simple organization structure, rather characteristic as informal

meetings with a horizontal organizational structure” Production

• “There has been held totally 5 project meetings” Management

• “The most employees were not much involved in the project” Production

• “The employees could not influence or participate in the choice of technological solutions

for the project.” Production

Distinctive views on a best way to do project suggested by different organizational levels

However, the distinction and disagreement seem to appear between management and operator level,

regarding a best way to accomplish to project, and understanding of employees involvement for the

whole project, especially at an early phase. The following citations have indicated clearly different

views of the same issues, whether concerning the decision making process, organizational structure

as a whole, the involvement of all employees to the project, the importance and necessity of training

activities.

“The project should be set up as first priority and involve in everyone in the company and giving

the information after signing the contract’…if you are not involving in the decision making process,

you just sit there and waiting, a bad culture.” Operation

“The whole process spent 3 months; we have a horizontal organizational structure and quick

decision process, but at the same time a possible problem that the company owner dominates the

management and the process.” Management, this statement indicates common understanding from

the management on this point of view forth issue

“There would not be delayed if the employees were participated or involved in more, neither would

be worse to keep this project secret for the employees and they did not have such expectations or

network for.” Management, this citation shows apparently disagreement with production manager

on this point of view

“I believed the process would be delayed if all employees and local trade union are involved in the

project since there would be more people to involve in.” Production

“Training activities for the new installation machine has been a poor dimension. There was no

training course before the machine was installed in the factory, so the company management should

have to priority the training package with machine subcontractor.” Production

Despite of top-down communication format, the employees made good efforts at all

Despite of top-down communication format, the employees appear to be cooperative and

understandable, or at least say, acceptable for this format of communication. The handling of most

critical project phase in summer 2006 confirmed this fact. As we can see the citation below, the

employees made good efforts for restructuring of shifting arrangement, from 2 to 3 in order to save

the situation for the company.

“The most critical project phase was at beginning of May 2006, when we have no products at our

restore, at the same time it was high season and new orders are coming and on top of that we have

the new machine to deal with. The employees were agreed to restructure from 2 to 3 shifts in the

summer to save the situation, so here management and employees stood at the same side.”

Management

Organization’s adaptation of this technology transferring

Once a technology transferring process has occurred in an organization, it usually follows by

significant impact for the organization and its environment. As a result, an organization’s adaptation

has to be made in order to meet the technology transferring. For this adaptation process, it is

essential for everyone in a company to understand this process and thus important to motivate all

employees to work together to handle the changes resulted by the process.

A common observation/picture of the current situation

In a changing organization development process, it is vital to approach a common view, at least a

common understanding of current situation in order to act cooperatively. The research team has

asked the same questions for different actors in the organization, and received same and different

responses on different issues. As for the company’s structure, culture, the ways of communication

and starting new projects, as well as daily routines, there seems to be a common observation/picture

of the current situation. The following citations from the interview survey have demonstrated this

trend:

• “It is a nature reaction among the employees that the project would result more work to do.

We succeed because our production managers were engaged in for extra shift

work……motivation of money for extra shifting work.” Management

• “There was less negative reaction than what we expected among the employees for this

project. Project started quickly and rumors spread fast.” Production

• “In September/October were employees able to operate equipment and technology

completely.” Production

• “The daily control followed by the shift itself as self-organized, due to our professional and

good shift leaders.” Production

Different opinions and views on the adaptation process and the project organization

A common observation/picture is not necessarily a common understanding, so the following

citations illustrated clearly disagreement between management and production on the same issue,

for instance, the view of success for this project.

The company should not use this project as a model for further project, we should have tried to buy

more time to initiate project, and at least training activities should have be taken place earlier.”

Production

“The company should use this project as a model for further project, especially tempo of the

project, and we did very well, the other companies would not be able to do the same project, great

satisfaction with our customers.” Management

The need of employee involvement into the project and need for an involving culture

Though many informants, including management claimed the organization has a horizontal

structure and this is an efficient structure to do the task, there is however a need of employee

involvement into the project and need for an involving culture. As the following citations have

indicated, it is not an entire healthy process that employees are not able to receive the information

that they feel their desire to receive, and this is a negative element for job motivation. There is

apparently a need for further communication and dialog inside of the company, especially when

operation workers made their improvement suggestions for increasing productivity, but not been

able to receive encouragement and feedback.

• “There has been done very little for create ownership attitudes among the employees. This is

a family company with no tradition for employee involvement.” Production

• “There has been a built culture…..that management is located in another building……have

no information until you absolutely must get……we have meetings with management about the need

for information, but nothing happened.” Operation

The summary of 2006 survey has outlined the following indication on the case company's situation

and observations in that stage of a Norwegian industrial democracy project and implementing

outcomes:

Distinctive views on a best way to do project suggested by different organizational levels.

Despite of top-down communication format, the employees made good efforts at all.

Different opinions and views on the adaptation process and the project organization.

The need of employee involvement into the project and need for an involving culture.

The conclusions from this survey were made clearly then:

Technically, the project was successfully completed and carried out with positive results

Organizationally, there is different understanding and interpretation of the project

Culturally, there is a clear need for adapting and up building for team culture for the

company and this was actually clearly written in the project proposal

The last conclusion is an interesting observation that naturally leads a spin-off questions to further

research and discussing for the research on this project:

How much organizational cultures are taking account for practical implementing of the Norwegian

industrial democracy? What cultural elements and dimensions need to be considered and what will

it be cultural impact for each involved actors in this project?

For further discussing on the addressed questions, there is a need to introducing cultural studies and

their findings as well as relevant theoretical argumentations. The current study will primarily focus

on quantitative based cultural dimension study findings and the theoretical argumentation for

convergence again divergence of a culture.

The cultural dimensions and their convergence versus divergence debates

The Dutch psychologist Geert Hofstede (1980) suggested cultural dimensions to quantify and

compare the cultural differences among over 10 countries in the world. The initiative 4 dimensions

he suggested were:

PDI Power Distance (A High Power Distance ranking indicates that inequalities of power

and wealth have been allowed to grow within the society. A Low Power Distance ranking

indicates equality and opportunity for everyone is stressed.)

IDV Individualism (A High Individualism ranking indicates that individuality and individual

rights are paramount within the society. A Low Individualism ranking typifies societies of a

more collectivist nature.)

MAS Masculinity (A High Masculinity ranking indicates the country experiences a high

degree of gender differentiation. A Low Masculinity ranking indicates a low level of

discrimination between genders.)

UAI Uncertainty Avoidance (A High Uncertainty Avoidance ranking indicates the country

has a low tolerance for uncertainty and ambiguity. A Low Uncertainty Avoidance ranking

indicates has less concern about uncertainty and has more tolerance for a variety of

opinions)

Lately he developed another dimension as:

LTO Long-Term Orientation (High Long-Term Orientation ranking indicates the country

prescribes to the values of long-term commitments and respect for tradition. A Low Long-Term

Orientation ranking indicates the country does not reinforce the concept of long-term, traditional

orientation .)

This LTO is however limited only within 23 countries, so data is not fully available for many

countries, nor for Norway yet. According to Hofstede's 4 cultural dimension, Norway, as well as

other Scandinavian countries have very high IDV values, modest low PDI, very low MAS and

modest UAI. This profile is also clearly indicated by the Norwegian industrial democracy thought

that providing great work freedom and self-organized work tasks, thus highly IDV, reducing power

distance between managers and production works with low PDI, equal opportunities for everyone,

means low MAS, cooperation and planning thus UAI.

The summary of 2006 survey showed however the Norwegian cultural dimensions, IDV, PDI, MAS

are not fully applied in the case company, particularly not at the production workshop. This is a

crucial indication that might explain the problems and needs for further improvement. If the

production workers are not able to master their daily tasks, it will be many obstacles, latent or

obvious, for increasing production efficiency. According to cultural scholars, the workforce

performance is strongly related to their values, attitudes and group culture. The definition and

correlation between these elements are described below:

Values - belief, conscience, idea, a mental standard or norm of a person. For example,

freedom, equality, discipline, responsibility. Usually values are established by a person's early

learning and they are not easily changed.

Attitudes - meanings, opinions, or viewpoints using by people who want to express their

belief, or their idea, standards or norms. Attitudes can either be expressed by a person (personal

opinions), or a group people (group opinions). An attitude can also be crossed by several values. For

example, the attitude "I enjoy my work" may indicate both the value of responsibility and the value

of freedom (at work). A typical example of attitudes can for instance be that people like their

circumstances around them or not, or people agree or disagree on one particular issue or others, or

some one prefers being associated with people or others not.

Culture - a complex system or order which is emerging among a group of people who have

common values and attitudes, and other social elements, such as rules, customs, and traditions.

Culture always reflects a group people, as small as a family, or as large as a nation, even as a

religion group which somehow larger than a nation, e.g. cultures from Islam, Christianity, or

Buddhism.

The relationships between values, attitudes, and culture can be presumably considered as the

follows: Culture possibly causes people's values which again determine their attitudes, for

example, their attitudes toward daily working tasks, or responsibility to the working tasks, which

again, reflecting workforce performance.

Cultural convergence versus cultural divergence

Adler and Doktor (1989) analyzed main conclusions from a great number of cultural studies for

business organizations and management, and found out there are mainly two categories among

them. These are named for the theory of cultural convergence and the theory of cultural divergence,

respectively.

Cultural convergence argues for a common culture and uniqueness of a culture, a typical example is

creating a organizational culture within multinational business company. The advantages in

convergence is standardizing and uniqueness so it is an easy and structured line to follow and

implementing of organizational culture, a way of centralizing culture. Cultural divergence argues

against this cultural centralizing and uniqueness approach, and prefer local solution and interpreting

of a culture.

Both two categories have their own argumentation and reasons, and it is a paradox and contra-

dictionary issue, also in practicing cases. On one side, we can notice a clearly developing trend in

cultural convergence as there are more and more multinational organizations applying their

organizational cultures across over countries' borders, say, McDonald fast food culture, Toyota

quality culture, etc. On other hand, the cultural implementations in each country or organization

must also meet their local circumstances and to be adapted into their local version, such as, same

MacDonald menu might be different focuses in different countries and Toyota's same quality

philosophy must have different context in different countries.

This paradox and contra-dictionary issue seems also apply the current case company, that on one

side, there is a clear need to creating an innovative and unique organizational culture, particular

addressed a team culture for production efficiency. On the other hand, the 2006 survey indicated the

different views and understanding among the different levels of the organization, in terms of team

culture, ways of doing a project, adaptation of the process. It seems no common understanding

between different levels of the organization, so it is therefore hard to create a common innovation

culture.

Further observation by the research team also indicates a cultural distinction between researchers

and company managers, so the first task researchers need to do is establishing common

understanding, recognizing and languages with the case company. This is a necessary step for

entering the case company and establishing field research arena. Many researchers experienced

already difficulties at this stage since researchers speak academic languages and company managers

speak industrial languages. It takes learning curve for researchers to learn industrial languages and

interpreting observation into academic languages for analysis. Action-Research approaches are used

for reducing this distinction.

Action-Research approaches in a cultural understanding context

Action research is by definition, an interactive inquiry process that balances problem solving

actions implemented in a collaborative context with data-driven collaborative analysis or research to

understand underlying causes enabling future predictions about personal and organizational change

(Reason & Bradbury, 2002). In another words, it is not only a traditional research on data analysis

and data interpreting, but also experimenting solution and suggestions to the problem, so the

research can sees as a dynamic process, rather than static observations.

Description below is citation from Wikipedia (action research) about action research processes, that

many methods have evolved that adjust the balance to focus more on the actions taken or more on

the research that results from the reflective understanding of the actions. This tension exists

between

• those who are more driven by the researcher’s agenda and those more driven by participants;

• those who are motivated primarily by instrumental goal attainment and those motivated

primarily by the aim of personal, organizational, or societal transformation; and

• 1st-, to 2nd-, to 3rd-person research, that is, my research on my own action, aimed primarily

at personal change; our research on our group (family/team), aimed primarily at improving

the group; and ‘scholarly’ research aimed primarily at theoretical generalization and/or large

scale change.

Action research challenges traditional social science, by moving beyond reflective knowledge

created by outside experts sampling variables to an active moment-to-moment theorizing, data

collecting, and inquiry occurring in the midst of emergent structure. “Knowledge is always gained

through action and for action. From this starting point, to question the validity of social knowledge

is to question, not how to develop a reflective science about action, but how to develop genuinely

well-informed action — how to conduct an action science” (Torbert 2002). In short, performing

action research is the same as performing an experiment, thus it is an empirical process.

Systems Model of Action-Research Process. (Prokopenya Viktor 15 May 2008. GNU)

According to systems model of action-research process (Prokopenya Viktor, 2008), the action

between the research planning and results plays a crucial function for the output. The input part

including preliminary diagnosis, data gathering and feedback of results are not solely independent,

but as a part of feedback from later stage of action and output, together generating learning and

knowledge database. The action is consist of learning process and action-planning with action-steps

so the whole process is rather dynamic changing than static data collecting.

This is what the research team experienced throughout this VRI project in the case company, that

primary intention and methods of implementing the Norwegian industrial democracy was not fully

successful. The later observation indicated the cultural distinction between the involved parts as

different levels and groups within the case company, but also between the research team and the

company. The intention of the VRI project was creating a team culture, an uniqueness of attitudes

among the employees for increasing production efficiency, but in real practice, lack of cultural

understanding, especially understanding of cultural divergence might be the largest barricade for the

VRI project.

The case reflection for this action-research approach in a cultural divergence understanding context

is that cultural building is something long term issue and it takes time and resources to creating a

common innovation or whatever wished culture. This is something not be done by few meetings or

short term actions, but rather long term process, that need to be patient and involved with actors.

Furthermore, cultural divergence means variety and local knowledge and all these need time to

learn for whoever outsiders. Action-planning and action-research are the benevolent tools for such a

long term process. Within feedback during the process, the research focus and approaches can be

redesigned according to changing circumstances in the case company, but the most essential about

all, upgrading and collecting of knowledge underway. In that way, the knowledge accumulation is a

dynamic process rather than a static measurement or observation.

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