1. 1
CULTURE

2. 2
Outline
Part I. What is culture? Understanding the concept of culture
Part II. What is the impact of culture? Leadership and HRM practices in
cultural context
Part III. How to manage cross-cultural interactions and culture change?
 Case discussions
 Cultural intelligence
Part IV. Developing global culture and identities

3. 3
Part I
Understanding the Concept of
Culture and Cross-Cultural
Differences

4. 4
Culture & Globalization In the Eighties October, 1989
A developmental
approach to
understanding of
Culture:
Change of Mindset
1990-2005

5. 5
February,
1990

6. 6
Cross Cultural Alliances
May, 1999

7. 7
From Culture’s
Differentiation to
Culture’s integration
Generation EA -
Ethnically Ambiguous
NYTimes, Dec. 28, 2003

8. 8
From To
Mindset
 Fear of other Cultures
 Culture’s Differentiation
 Ethnocentric Mind
Mindset
 Alliances across cultures
 Culture’s Interface &
Integration
 Global Mind
Where were we, where are we and where are we going?

9. 9
What is Culture?
A Shared Meaning System.
 Shared Values
 Shared Cognition
 Social Glue (Smircich, 1984)
 The software of the mind (Hofstede,1990).
 Shared knowledge structure that results in
decreased variability (Erez & Earley,
1993).

10. 10
Artifacts and Creation
- Art -Technology
- Patterns of Behavior
Values
Testable in the physical context
Testable by social consensus
Basic Assumptions about
Relationship to Environment
Reality, Time, Space
Human Nature, Activity & Relationship
Culture – a Multi Layer Construct
(Schein,1985)
Visible -
External
Greater Level
of Awareness
Invisible –
Internal

11. 11
Representations of Culture
 Artifacts: Architecture and design
 Rituals
 Physical Proximity
 Dress Codes
 Expression of Emotions
 Beliefs and values

12. 12

13. 13
Cultural Values
(Hofstede, 1980, 1991, 2001)
 Individualism Vs. Collectivism - The way
people relate to each other:
Individual Vs. group goals
Nuclear Vs. Extended families
Self interest Vs. interest in group members
Preference to be by oneself Vs. with others

14. 14

15. 15
Cultural Values (Cont.)
 Power Distance (Equality Vs. inequality)-
The extent to which members of a culture
accepts inequality and large differentials
between those having power, and those
having little power.

16. 16
Cultural Values (Cont.)
 Uncertainty Avoidance - reflects the emphasis
on rules and regulations, rituals, and extensive
documentation.
 Masculinity Vs. Femininity -
Gender differentiation in roles and occupations is
high in masculine cultures, and low in feminine
cultures.
 Future Time Orientation –
Long versus short term planning.

17. 17
Hofstede, 1980

18. 18
Cultural Values
(GLOBE, 1996-2004)
 Collectivism 1- Social
 Collectivism 2- Institutional
 Power Distance
 Performance Orientation
 Future Orientation
 Assertiveness
 Gender Egalitarianism
 Humane Orientation

19. 19
National Culture (House et al., 2004)
Israel Germany USA Singapor
e
China
Mean Mean Mean Mean Mean
Uncertainty
Avoidance 4.01C 5.22A 4.15B 5.31A 4.94A
Power
Distance 4.73C 5.25B 4.86B 4.99B 5.04B
Collectivism
Group
based 4.70B 4.02C 4.25C 5.64A 5.80A
Performance
Orientation 4.08B 4.25B 4.47A 4.90A 4.45A

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High Context Vs. Low Context Cultures
 Collectivistic cultures tend to be high
context cultures.
In this culture the context of the message
is important for interpreting the message
and for sense-making.
 Individualistic cultures tend to be low
context cultures.
In these cultures the message is
interpreted independent of its context.

21. 21
Tight Vs. Loose Cultures
 Tight Cultures - High level of homogeneity,
and strong shared values.
 Loose Cultures - Low level of homogeneity,
and high diversity.

22. 22
WORK BEHAVIOR
(performance)
MOTIVATIONAL APPROACHES:
• Rewards
• Participation in D-M and G-S
• Job enrichment
• TQM
INDEPENDENT / INTERDEPENDENT SELF
Self-Derived Motives:
(1) Enhancement; (2) Efficacy; (3) Consistency
CULTURAL VALUES
Collectivism / Individualism
Power Distance
Cultural Self Representation Erez & Earley, 1993

23. 23
Model Interpretation
Cultural Values
 are represented in the Self.
 shape different selves - Independent and
Interdependent Self.
 serve as criteria for evaluating the meaning of
management practices.
 managerial practices positively affect behavior
when the self interprets them as contributing to a
person’s self-worth and well-being.

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A Multi-Level Model of CultureA Multi-Level Model of Culture ((Erez & Gati, 2004Erez & Gati, 2004))
Individual
Cultural self-
representation
Group Culture
Organizational Culture
National Culture
Global Corporate
Culture
Top-
Down
Bottom
Up
Forces
at macro
levels
affect
changes
at micro
levels of
culture
New shared
meanings at micro
levels shape the
macro level cultures
through bottom-up
processes

25. 25
Part II
Culture’s Consequences:
Leadership & HRM in Cultural Context

26. 26
Leadership: What is it for Who?
 “Arabs worship their leaders – as long as they are in power”
 “The Dutch place emphasis on egalitarianism and are skeptical
about the value of leadership. Terms like leader and manager
carry a stigma. If a father is employed as a manager, Dutch
children will not admit it to their schoolmates…”
 “Russians seek power, strength and authority in their leaders.”
 “The Malaysian leader is expected to behave in a manner that
is humble, modest and dignified.”

27. 27
 “The Americans appreciate two kinds of leaders. They seek
empowerment from leaders who grant autonomy and
delegate authority to subordinates. They also respect the
bold, forceful, confident, and risk-taking leader as personified
by John Wayne.”
 “For Europeans,everything seems to indicate that leadership
is an unintended and undesirable consequence of
democracy.”
 “Indians prefers leaders who are nurturant, caring,
dependable, sacrificing and yet demanding, authoritative,
and strict disciplinarian.”
 “German leaders / managers are expected to have the
expertise in resolving technical problems. There is no need
to ‘motivate’ workers; all they need to do is to answer all the
questions.”

28. 28
‘Universal’ definition of Leadership
(GLOBE project; House et al., 2004)
 The ability of an individual to influence,
motivate, and enable others to contribute
toward the effectiveness and success of the
organization of which they are members.

29. 29
Leader values,
beliefs,
assumptions
Leader
Behavior
Subordinate
behavior
Reinforce = culture fit: leader acceptance & effectiveness
Not reinforce = no culture fit: no leader acceptance & effectiveness
Culture: Societal
values, beliefs,
assumptions
Influence of Culture on Leadership
(Aycan, 2003)
Culture: Values,
prototypes, ILTs,
expectations,
norms, beliefs
Subordinate
perception &
attribution
Culture: Repertoire
of behavior,
enactment, power
Culture:
Repertoire of
behavior,
motivation
Organizational
contingencies and
structural context;
assessment of member
needs
Individual
characteristics (age,
gender, experience,
competencies)
Individual
characteristics (age,
gender,
competencies)
Organizational
contingencies and
structural context;
assessment of leader
intentions

30. 30
“Employees
want
Participation”
Ask opinions
of employees
Silence
Not reinforce = no culture fit: no leader acceptance & effectiveness
Culture X
(low power distance)
Culture Y
(high power distance)
“He is
testing us” or
“He doesn’t do
what to do”
Influence of Culture on Leadership:
Illustration 1

31. 31
“Employees
want care and
guidance in their
personal &
professional life”
Ask how employees
are doing in their
family life
Silence
Not reinforce = no culture fit: no leader acceptance & effectiveness
Culture X
Culture Y
“He is violating
our privacy” or
“Why is he asking
this? What is his/her
intentions?”
Influence of Culture on Leadership:
Illustration 2

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Ideal Leadership Prototypes
(House et al., 2004)
 Charismatic / value-based: visionary, inspirational, self-sacrificial,
integrity, decisive, performance-oriented.
 Team-oriented: team integrator, diplomacy, benevolent,
administratively competent.
 Self-protective: self-centered, status-conscious, conflict-inducer, face
saver, procedural.
 Participative: non-autocratic, participative
 Humane: modest and humane oriented.
 Autonomous: individualistic, independent, autonomous, and unique.

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Anglocluster
LatinAmericancluster
Middle-Easterncluster
Middle-Easterncluster
GermanicEuropecluster
Middle-Easterncluster
SouthernAsiaCluster
NordicEuropecluster
EasternEuropecluster
LatinAmericancluster
SouthernAsiaCluster
NordicEuropecluster
Cross-Cultural Differences in
Leadership Prototypes

34. 34
Self-efficacing
Status conscious
Excellence oriented
Honest
Elitist
AutonomousRisk taker
Worldly
Indirect
Fraternal
Intra-group competitor
United StatesChina
USA vs. China (Javidan et al., 2006)

35. 35
Culture and management
of work events
Use of sources of guidance:
 Superiors
 Unwritten rules
 Specialists
 Opinions based on own experience
 Formal rules & procedures
 Widely accepted beliefs
Influenced by the cultural context…

36. 36
HRM in cultural context:
The challenges
 For multinational corporations
 Global standardization vs. local competition
 Transition in the HRM approach:
globalization glocalization localization
 For multicultural domestic organizations
 Diversity management; “unity through diversity”
 Domestic organizations in transitioning economies
 Adaptation of ‘US’ HRM philosophies and practices to local
cultural identity
 Change of organizational culture

37. 37
Influence of Culture on HRM:
The Model of Culture Fit (Aycan, Kanungo, et al., 2000)
Ecological,
Socio-Economic
& Political Context
Ecological Context
Legal & Political
Context
Historical Events
Socialization
Process
Organizational
Characteristics
Market Characteristics
Ownership / Control
Resource Availability
Socio-Cultural
Context
Internal Work Culture
HRM Practices
Job Design
Supervisory Practice
Reward Allocation
Nature of Industry
Task-Driven Assumptions
Employee-Related
Assumptions
Values, assumptions,
belief systems,
behavioral patterns
Prevailing managerial
assumptions about
what the key tasks are and how
they should be
best accomplished.
Prevailing managerial
assumptions about
employee nature and
behavior
Size, structure, strategy

38. 38
Socio-Cultural Internal Work HRM Practices
Context Culture
Fatalism
Empowering
Supervision
Influence of Socio-Cultural Context on
Work Culture & HRM Practices
Power Distance Proactivity Job Enrichment
Malleability Performance –
Reward Contingency
Job Enrichment

39. 39
Cultural Variations and HRM practices
(Aycan, 2005)
1. Individualism vs. Collectivism
Collectivism Individualism
2. Performance-orientation
Low High
Maintain Good Interpersonal
Relationships & In-group Harmony
Improve Performance
3. Attitudes towards work
Work to live Live to work
4. Attitudes towards rules
Particularism Universalism
4 7
4 7
4
4

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6. Attitudes towards criticisms
Negative Positive
8. Problem-solving approach
Avoidance Third-party involvement Confrontation
7. Communication style
Indirect, subtle Direct, assertive
5. Nature of work relationships
Emotional Contractual
4 7
4
4
4

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Maintain good interpersonal
relationships and in-group harmony
Improve performance
• Subjective evaluations in recruitment, selection,
and performance appraisal; indirect, subtle and non-
confrontational feedback.
• Objective and systematic evaluations in
recruitment, selection, and performance appraisal;
direct and explicit feedback.
• Preference for internal or network-based
recruitment
• Preference for formal, structured and widespread
use of recruitment channels
• Criteria used in need assessment for training, career
planning, and compensation and reward management
emphasize loyalty
• Criteria used in need assessment for training,
career planning, and compensation and reward
management emphasize performance outcomes
and merit
• Strong emphasis on employee welfare programs
and intrinsic rewards
• Awards, recognition, and bonuses for good
performance
• Criteria used in recruitment, selection, and
performance appraisal emphasize ability to maintain
good interpersonal relationships and work in
harmony with others.
• Criteria used in recruitment, selection, and
performance appraisal emphasize job-related and
technical competencies

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Maintain Status Hierarchy Promote egalitarianism
& participation
1. Societal & Organizational Structure (Power Distance)
Hierarchical Egalitarian
3. Attitudes towards rules
Particularism Universalism
2. Decision making process
Centralized Consultative Participative
4. Most common leadership Style
Autocratic Paternalistic Democratic
4 7
4 7
4 7
4 7

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Maintain status hierarchy Promote
egalitarianism & participation
• Criteria used in recruitment, selection,
performance appraisal, training and development
need assessment, and compensation and reward
management emphasize good interpersonal
relationships with higher management, social class,
seniority, and age
• Criteria used in recruitment, selection,
performance appraisal, training and development
need assessment, and compensation and reward
management emphasize job-related competencies
and merit. Equal employment opportunity is
encouraged
• Differential criteria and methods used in
recruitment, selection and performance appraisal
• Uniform criteria and methods used in
recruitment, selection and performance appraisal
• Top-down performance appraisal • Multiple assessors and multiple criteria in
performance appraisal
• Non-participative decision making in training need
assessment, job analysis, and human resource and
career planning
• Participative decision making in training need
assessment, job analysis, and human resource and
career planning
• One-way lecturing; role-modeling of superiors • Participative, interactive training

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Inflexibility; lack of
belief
in change &
development
Flexibility; belief in
change & development
1. Fatalism
High Low
4. Perception of human nature
Evil & stable Good & malleable
2. Planning
Past-oriented Present-oriented Future-oriented
(short-term) (long-term)
3. Attitudes towards change
Negative Neutral Positive
4 7
4 7
4 7
4 7

45. 45
Inflexibility; lack of belief in
change and development
Flexibility; belief in
change and development
• Preference for internal or network-based
recruitment
• Preference for external recruitment
• Low performance-reward contingency • High performance-reward contingency
• Process-oriented performance evaluation
(intention, effort, motivation to do the job)
• Results-oriented performance evaluation
• Not-so-strong emphasis on training and
development
• Strong emphasis on training and
development
• Detailed, narrowly defined, fixed job
desciptions
• Broad, flexible, dynamic job descriptions
• Employee security plans • Equity principle in compensation and reward
management; individual bonuses /
commissions

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Summary of Part II
 National and organizational culture has an impact on leadership and HRM
practices.
 There needs to be a fit between the cultural context and HRM practices.
Which one to change first to enhance the fit: values or practices?
 The winning combination: adapt the HRM practices to fit the organizational
culture & adapt the organizational culture to fit the HRM practices.
 Start changing the HRM practices gradually.
 Start the change at the behavioral level. Through rewarding and modeling of the
correct behavior, values are expected to change. Leadership is the key in this
process.
 Cultural change should be supported by HRM systems: recruitment & selection,
training & development, performance appraisal & rewarding.

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HRM Practices
Leadership
Organizational
Culture: Values
Change: Where to start?

48. 48
Part III
How to Manage Cross-Cultural
Interfaces and Culture Change

49. 49
 Cultural intelligence is being skilled and flexible about understanding a
culture, learning increasingly more about it, and gradually shaping
one’s thinking to be more sympathetic tot eh culture and one’s
behavior to be more fine-tuned and appropriate when interacting with
others from the culture (Thomas & Inkson, 2005).
 Knowledge – of culture and of the fundamental principles of cross-
cultural interactions. Knowing what culture is, how cultures vary, and
how culture affects behavior.
 Mindfulness – the ability to pay attention in a reflective and creative
way to cues in the cross-cultural situations encountered.
 Behavioral skills – based on knowledge and mindfulness. These skills
become competent across a wide range of situations and involve
choosing the appropriate behavior from a well-developed repertoire of
behaviors that are correct for different intercultural situations.
CQ: A Key to effectively managing cross-cultural
difference

50. 50
“A person with high cultural intelligence can somehow tease out of a
person’s or group’s behavior those features that would be true of all
people and all groups, those peculiar to this person or this group, and
those that are neither universal nor idiosyncratic” (Earley & Masokowski,
2004, p.140)
Cultural intelligence has three components (Earley & Ang, 2003)
Cognitive: The skills needed to conceptualize a new culture and to gather
information about a new world.
Motivational: Desire to adapt to the other culture.
Behavioral: Capability of an individual to actually engage in behaviors
which are adaptive.

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Case analysis
 Moscow Aerospace
 Mr. Smith and Mr. Gonzales

52. 52
Part IV
Globalization,
Global Corporate Cultures,
Global Identities

53. 53
Globalization
NAFTAEUROPEAN COMMUNITY

54. 54
Protest against the Globalization

55. 55
Approaching Globalization at two
levels
 The corporate level – A Global Corporate
Culture
 The individual level – A Global Identity

56. 56
How a Global Corporate Culture is
Created?
 Culture = Shared Meaning System
(Bandura, 1986; Hofstede, 1980; Kluckhon, 1952;
Shewder & LeVine, 1984;Triandis, 1972)
 Shared Meaning ~ Belonging to same
Culture
 Global Culture = Shared Meanings and
Values by Players in the Global Context

57. 57
Definition:
 Global Corporate Culture: the shared
understanding of the visible rules, regulations
and behaviors, and the deeper values and
ethics of the global work context, beyond
national borders

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 The Functional role of values:
Adaptation to the Environment

59. 59
Global Work Context
 Geographical dispersion
 Cultural Diversity
 High Uncertainty
 Global Competition
 Threat to one’s cultural Identity –
Getting Lost
Global Values
 High Interdependence
-Networks
 Openness to Diversity
 Trust & Ethical Behavior
 Low Power Distance
(Partnership)
 Openness to Change
 Learning
 Competitive Performance
 Quality and Innovation
 Customer Orientation
 People focus

60. 60
SStudy 1:tudy 1:
Global Corporate Values in MNCGlobal Corporate Values in MNC
(Berson, Erez, & Adler, 2004)(Berson, Erez, & Adler, 2004)
Organization: A Fortune-20 high tech organizationA Fortune-20 high tech organization
Operating in more than 100 countriesOperating in more than 100 countries
Measures: Content Analysis of:
Company Annual Reports from the year 2000
 CEO speeches from 2000

61. 61
CEO quotes regarding Identity
Annual Report Speeches
“Our … beliefs and core
values…., include
•Respect for the
individual
• Contribution to
customers
• Contribution to the
community”.
“Who are we? What do we
believe? What are our values?
•We preserve…values like
trust, respect, integrity,
•…Contribution to our
customer, as well as to the
community…”

62. 62
Annual Report Speeches
•“The company…” has
long been admired for our
culture-
•A performance
meritocracy
• ..and a firm belief that
every community in which
we…. work should benefit
by our presence”.
•Benefiting from each others’
successes and suffering from
each others’ failures…
•As diverse as our languages,
our cultures… may be,
together we are all part of
one ecosystem now”.
Interdependence

63. 63
Annual Report Speeches
“Leadership in the digital
renaissance will not be
about hierarchy, title, or
status”
Egalitarianism:
“Our highly
decentralized
structure has enabled
us to move quickly”
Acceptance of Diversity
“Every community in
which we live and work
should benefit by our
presence”.
“Diversity nourishes the
soul of our company”
Egalitarianism; Diversity

64. 64
Global Values
Individualism
ShortTerm
O
rientati
Long
Term
O
rientatio
Change/Innovation
Com
petitiveness
Egalitarianism
A
ccept.ofDiversity
Interdependence
MeanRatiosofSearchTerms
.016
.014
.012
.010
.008
.006
.004
.002
0.000
CEO Speeches
Annual Report

65. 65
International Alliances
MNC
International Mergers & Acquisitions
Study 2. Cultural Interface: How Local
Subsidiaries & Employees Adapt to the Global
Corporate Context?
How to bridge between
Cultural icebergs?

66. 66
Cultural Adaptation
(Berry, 1992)
High Low
High Integration Assimilation
Low Separation Marginalizat.
AttractivenesstotheGlobal
CorporateCulture
Preservation of Own Values
Glocal
Local
Global

67. 67
Key success factors (KSFs) affecting structuralKey success factors (KSFs) affecting structural
cooperations outcomecooperations outcome
Proceeding of
the deal
Business
environment
Deal strategy
National culture
Leadership
Organizational
culture
Deal
motivations

68. 68
KSFs Success
Integration
Enhancing success in StructuralEnhancing success in Structural
Cooperations - a system modelCooperations - a system model
Analysis
Synthesis
Identifying gaps in KSFs is a necessary but
insufficient action for success

69. 69
Study 3:
Global and Local Managerial Roles
Organization: A Fortune-20 high tech organization.
Operating in more than 100 countries
Participants: 406 mid-level managers from 21
countries, classified into 6 regional zones.
Measure
A 31-item survey of Managerial Role Perceptions

70. 70
Task
People
Strategic
Planning
Change
Improve organizational efficiency… align work
with vision...
Demonstrate uncompromising integrity
Manage business processes to achieve
breakthrough objectives
Build and execute a financial strategy that
achieves growth
Increase the org. ability to anticipate
global trends
Lead the organization through ongoing
change
Constructively intervene to resolve
performance problems
Create an environment of trust and
respect
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Four Factors of the Managerial RoleFour Factors of the Managerial Role
Local FocusLocal Focus
Global FocusGlobal Focus

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Findings
 Similarities across Cultures with respect to
Global managerial roles
 Significant Differences across Cultures with
respect to Local managerial roles.

72. 72
How Individual Employees Adapt to the
Global Context?
 Developing a sense of belongingness
 Social Identity Theory (Tajfel, 1978; Tajfel & Turner,
1979)
 Identity reflects individuals’ membership in a
group

73. 73
Global Identity – A Sense of
Belongingness to a Worldwide Culture (Arnett, 2002).
Global Corporate Identity:
“Individual’s sense of belonging to, and
Identification with groups
)such as multicultural teams(,
operating in the global work environment of
multinational organizations (Gati & Erez, in press(

74. 74
 A Global and a Local Identity
 Multiple Identities

75. 75
Summary
Adaptation to Cultural Interface by
 Developing Global Corporate Values
 Acceptance of Diversity
 Interdependence
 Openness to change
 Balancing the global corporate values with the local
cultural values.
 Think Global Interact Local
 Creating a sense of belongingness to the MNC and
strengthening employees’ Global Identity
 Creating opportunities for involvement in global activities
 Facilitating the integration/Duality of a Global and a Local
Identity by a supportive corporate culture