This document discusses managing across cultures. It covers applying Hofstede's cultural dimensions model to understand differences between countries. Organizational cultures are shaped by both national culture and corporate strategies. As companies become more global, managing diversity across many cultures becomes important. Effective multicultural management can improve creativity and decision making.

1. The Role of Culture
Managing Across National and
Organizational Cultures
Mark McKenna
BUS 162 (6), International and Comparative Management
San Jose State University
Chapters 5 and 6, Hodgetts, Luthans and Doh, International
Management: Culture, Strategy and Behavior , 6th edition (New York:
McGraw-Hill Irwin, 2006)
Adapted from PowerPoint slides by R. Dennis Middlemist, Professor of
Management, Colorado State University

2. OVERVIEW
1. Applying Hofstede’s Cultural
Dimensions
2. Organizational Cultures
3. Multiculturalism

3. APPLYING HOFSTEDE’S
CULTURAL DIMENSIONS
1. Cross-Cultural Differences and
Similarities
2. Six Basic Cultural Variations
3. Exercise: A Jumping Off Place

4. Differences and Similarities
 Challenges for effective cross-cultural
management
◦ Parochialism: the tendency to view the world
through one’s own eyes and perspective
◦ Simplification: the process of exhibiting the
same orientation toward different cultural groups
 Similarities across cultures
◦ In US and Russian firms organizational behavior
modifications led to performance improvements
◦ Antecedents of organizational commitment were
similar in US and Korea firms

5. Differences and Similarities
 Differences across cultures
◦ In the criteria used in evaluating personnel
Netherlands France Germany Britain
Reality Imagination Leadership Helicopter
Analysis Analysis Analysis Imagination
Helicopter Leadership Reality Reality
Leadership Helicopter Imagination Analysis
Imagination Reality Helicopter Leadership
◦ In the norms and rules regulating wages,
compensation, pay equity, and maternity leave
◦ In labor relations, job design, and the design of
employee training programs

6. Basic Cultural Variations
1) What is the nature of people?
2) What is the person’s relationship to
nature?
3) What is the person’s relationship to other
people?
4) What is the modality of human activity?
5) What is the temporal focus of human
activity?
6) What is the conception of space?

7. A Jumping Off Place
 A successful, mid-sized Ohio-based US
manufacturing firm decides to open a plan
near Madrid, Spain.
 Factors in the decision include:
◦ The end of its licensing agreement with a
German firm
◦ New patents and technology
◦ Lower labor costs in Spain
 The Spanish partner will provide on-site
support; the US firm will provide capital,
technology and training

8. A Jumping Off Place
 If the venture in Spain is successful, the US
manufacturer plans to use this experience to
open plants first in Italy, then in France
 Put yourself in the position of an
international consultant or manager
◦ What differences would you anticipate between
Spain and the US?
◦ How might lessons learned in Spain need to be
adapted for operations in Italy?
◦ How would France differ from both, and from the
U.S.?

9. Figure 4-5: A Power-Distance and
Individualism-Collectivism

10. Figure 4-6: A Power-Distance and
Uncertainty-Avoidance

11. Figure 4-7: A Masculinity-Femininity
and Uncertainty-Avoidance

12. A Jumping Off Place
Power Indivi- Uncertainty
Masculinity
Distance dualism Avoidance
Low High Low Mid
USA
(40) (91) (46) (62)
Mid Low High Low
Spain
(57) (51) (86) (42)
Low High High Mid
Italy
(50) (76) (75) (70)
Mid Mid High Low
France
(68) (71) (86) (43)

13. Caveats and an Observation
 Caveats…
◦ What is typical?
◦ How discrete are subcultures?
◦ Are values and beliefs fixed or fluid?
◦ What are the significant “dimensions”?
◦ Are attributes generalizable or situation specific?
 Observation…
◦ “Understanding the properties and prospects of
nations requires openness to the richness and
diversity of national practices and institutions”
(Brendan McSweeney, http://geert-hofstede.international-business-
center.com/mcsweeney.shtml)

14. ORGANIZATIONAL
CULTURES
1. Definition
2. Interactions between National and
Organizational Cultures
3. Strategic Predispositions of
International Organizations
4. A Typology of Organizational
Cultures

15. Definitions
 Hodgetts, Luthans and Doh (p. 154)
◦ “shared values and beliefs that enable members
to understand their roles and the norms of the
organization.”
 Edgar Schein (1997, p. 12)
◦ “a pattern of shared basic assumptions that the
group learned as it solved its problems of
external adaptation and internal integration, and
that has worked well enough to be considered
valid and, therefore, to be taught to new
members as the correct way to perceive, think
and feel in relation to those problems.”

16. Interactions
 The values and beliefs employees bring to
the workplace affect their behavior within the
workplace
 Working for MNC may accentuate rather
than moderate or erase cultural differences
 Cultural differences across subsidiaries
often cause coordination problems
 Important dimensions of cultural difference
within organizations include: motivation,
relationship, identity, communication,
control, and conduct

17. European’s Perceptions of Cultural
Dimensions of U.S. Operations/Same MNC
Activities Outputs
Job Person
Corporate Professional
Open Closed
Tight Loose
Conventional Pragmatic
30 31 32 33 34 35 36 37 38 39 40 41 42
Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and
European Operations (B) of the Same MNC

18. European’s Perceptions of Cultural Dimensions
of European Operations/Same MNC
Activities Outputs
Job Person
Corporate Professional
Open Closed
Tight Loose
Conventional Pragmatic
30 31 32 33 34 35 36 37 38 39 40 41 42
Adapted from Figure 6–1 Europeans’ Perception of the Cultural Dimensions of U.S. Operations (A) and
European Operations (B) of the Same MNC

19. STRATEGIC
PREDISPOSITIONS
1. Ethnocentric
2. Polycentric
3. Regiocentric
4. Geocentric

20. Strategic Predispositions
Philosophies of  Ethnocentric predisposition
Management ◦ A nationalistic philosophy of management
Ethnocentric whereby the values and interests of the
predisposition parent company guide strategic decisions.

21. Strategic Predispositions
Philosophies of  Polycentric predisposition
Management ◦ A philosophy of management whereby
strategic decisions are tailored to suit the
Ethnocentric
predisposition cultures of the countries where the MNC
operates.
Polycentric
predisposition

22. Strategic Predispositions
Philosophies of  Regiocentric predisposition
Management ◦ A philosophy of management whereby the
Ethnocentric firm tries to blend its own interests with
predisposition those of its subsidiaries on a regional
basis.
Polycentric
predisposition
Regiocentric
predisposition

23. Strategic Predispositions
Philosophies of  Geocentric predisposition
Management ◦ A philosophy of management whereby the
company tries to integrate a global
Ethnocentric
predisposition systems approach to decision making.
Polycentric
predisposition
Regiocentric
predisposition
Geocentric
predisposition

24. Typology of Organizational Cultures
Equity
Fullfillment-oriented Project-oriented
culture culture
INCUBATOR GUIDED MISSILE
Person Task
Emphasis Emphasis
FAMILY EIFFEL TOWER
Power-oriented Role-oriented
culture culture
Hierarchy

25. Typology of Organizational Cultures
 Family culture
◦ Power oriented and headed by a leader who is
regarded as a caring parent
◦ Management looks after employees, ensures
they are well-treated
◦ May promote loyalty and commitment or lead to
support for an ineffective leader
 Eiffel tower culture
◦ Jobs are well defined
◦ Everything is coordinated from the top
◦ Relationships are specific and job-related
◦ Status remains with the job

26. Typology of Organizational Cultures
 Guided missile culture
◦ Work is typically undertaken by teams or project
groups
◦ Individual expertise is more important than formal
hierarchies
◦ Team members are interdependent and (at least
potentially) equal
 Incubator culture
◦ Organizations as incubators for self-expression
and self-fulfillment
◦ Little formal structure
◦ Focus is on development of an innovative product
or service

27. MULTICULTURALISM
1. The Evolution of International
Corporations
2. Problems and Advantages of
Diversity
3. Putting It All Together

28. The Evolution of International
Corporations
Phase1 Phase2 Phase3 Phase4
Domestic International Multinational Global
firms firms firms firms
Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent
Publishing, 1991), p. 123.

29. Phases of Multiculturalism
 Domestic firms
◦ Focus on delivering a product or service in a
domestic market
◦ Ethnocentric perspective – “one good way”
◦ Multicultural challenge is to manage intra-national
cultural diversity
 International firms
◦ Multidomestic market-oriented strategy
◦ Polycentric or regiocentric perspective – “many
good ways”
◦ Multicultural challenge is to manage cross-
cultural relationships with clients and employees

30. Phases of Multiculturalism
 Multinational firms
◦ Focus is on lower costs and increasing efficiency
◦ Multinational perspective – “one least-cost way”
◦ Multicultural challenge is to manage intra-
organizational cultural diversity
 Global firms
◦ Global dominance through mass customization
◦ Geo/multicentric perspective – “many good ways”
◦ Multicultural challenge is to manage both internal
and external diversity

31. Problems and Advantages
 Problems associated with diversity
◦ Lack of group cohesion
◦ Mistrust of others
◦ Erroneous or biased perceptions
◦ Miscommunication
 Advantages of diversity
◦ Enhanced creativity
◦ Better decision making; preventing groupthink
◦ More effective and productive performance
 Cross-cultural groups are better at
innovation; single culture groups are more
effective performing routine tasks

32. Putting It All Together
 Complexity in organizational culture
◦ Interface between national and
organizational culture
◦ Types of organizational culture
◦ Degree of multiculturalism
 Implications for managers
◦ National cultural values
 Impact on employee behavior
 Are not easily changed
◦ Particularly important when considering
 The management of human resources
 Mergers and acquisitions