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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.

Cowling, A., Stanworth, M., Bennet, R., Curran, J. & Lyons, P. (1988) Behavioural sciences for managers. London: Arnold.

Delhaye, J-L., Bröcker, A., Ylitalo, J. & Immonen, S. (2000) MUSCLES Multi-Site Concurrent Engineering for Large Aircraft Engineering and Support. In Weber, F. & Pawar, K.S. (eds.) Proceedings of the 6th International Conference on Concurrent Enterprising. Nottingham: Centre for Concurrent Enterprising, 379-386.

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., Hyttinen, M. & Komaki, J. (1994) Managers' way of interacting and successful leadership: A cross-cultural evaluation. 23rd International Congress of Applied Psychology, July 17-22, Madrid, 27.

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.

Jassawalla, A.R. & Sashittal, H.C. (1999) Building collaborative cross-functional new product teams. Academy of Management Executive 13 (3), 50-62.

Katzenbach, J.R & Smith, D.K (1993) The Wisdom of Teams – Creating the high performance organizations. Boston, Harvard Business School Press.

Järvenpää, E., Carayon, P., Hajnal, C., Lim, S.-Y., and Yang, C.-L., (1993) A cross-cultural framework for the study of stress among computer users: comparison of the USA and Finland. In M. J. Smith, G. Salvendy, (Eds.) Human-Computer Interaction: Applications and Case Studies. The Netherlands: Elsevier, Amsterdam, pp. 874-879.

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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.

Montebello, A.R. (1994) Work teams that work: skills for managing across the organization. USA, Best Sellers Publishing.

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.