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TU-53.309 Cross-cultural management

TU-53.309 Cross-cultural management. Implications of culture on organizations, management and leadership 31.10.2002 Stina Immonen. Content. Advancements of cross-cultural management studies from the viewpoint of OB Impact of cross-cultural issues on organizations, teams and individuals

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TU-53.309 Cross-cultural management

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  1. TU-53.309 Cross-cultural management Implications of culture on organizations, management and leadership 31.10.2002 Stina Immonen SI/HUT DIEM 2002

  2. 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 SI/HUT DIEM 2002

  3. Advancements in CCM research SI/HUT DIEM 2002

  4. 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 SI/HUT DIEM 2002

  5. 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 SI/HUT DIEM 2002

  6. 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 SI/HUT DIEM 2002

  7. 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) SI/HUT DIEM 2002

  8. 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 SI/HUT DIEM 2002

  9. 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 SI/HUT DIEM 2002

  10. Conclusions • Advancements in international business • Interaction between researchers and practionnaires • Increased need of knowledge have developed CCM research SI/HUT DIEM 2002

  11. 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 SI/HUT DIEM 2002

  12. Impact of cross-cultural issues on organizations SI/HUT DIEM 2002

  13. 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 SI/HUT DIEM 2002

  14. 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 SI/HUT DIEM 2002

  15. Method of control in multinational enterprises (Marchan et al. 1996) • Formal • Structure • Reporting systems • Budgets • Performance targets • Informal • Personal relationships • Corporate culture SI/HUT DIEM 2002

  16. 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 SI/HUT DIEM 2002

  17. 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 SI/HUT DIEM 2002

  18. have been used in explaining differences in • organizational structures • decision-making processes • manager-subordinate relations • commitment to organization • etc. SI/HUT DIEM 2002

  19. 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 Examples of cultural classifications and their influences on management(Rodrigues, 1996) SI/HUT DIEM 2002

  20. 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 SI/HUT DIEM 2002

  21. 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 SI/HUT DIEM 2002

  22. Cross-cultural issues on team level • Teams • communication • leadership SI/HUT DIEM 2002

  23. 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 SI/HUT DIEM 2002

  24. 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 SI/HUT DIEM 2002

  25. Adapted from Tuckman (1965), Katzenbach & Smith (1993), Montebello (1994) and Jassawal & Sashittal (1999) SI/HUT DIEM 2002

  26. MC, CF team success factors from AIRBUS case SI/HUT DIEM 2002

  27. Cross-cultural issues on individual level • Individuals • expatriation process • inpatriation process • repatriation process SI/HUT DIEM 2002

  28. 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” SI/HUT DIEM 2002

  29. 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 SI/HUT DIEM 2002

  30. 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 SI/HUT DIEM 2002

  31. Conclusion • Cross-cultural awareness is needed • in managing internationalization process on organizational level • in managing team processes • on individual level SI/HUT DIEM 2002

  32. CCM research at HUT DIEM SI/HUT DIEM 2002

  33. 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 SI/HUT DIEM 2002

  34. 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 organization Comparative studies: structured observation SI/HUT DIEM 2002

  35. 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 SI/HUT DIEM 2002

  36. 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 SI/HUT DIEM 2002

  37. 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. • Hyttinen, M. & Immonen, S. (1994) Organisaatiokulttuuri ja johtamistapa eri toimintaympäristöissä. (Organizational culture and supervisory behavior in different environments) Hallinnon tutkimus 13, 12-21. • 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. SI/HUT DIEM 2002

  38. 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 6th 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. SI/HUT DIEM 2002

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