Chapter 3 Organizational Culture Diversity

Chapter 3
ORGANIZATIONAL CULTURE &

DIVERSITY
Tra T Ngo, 2021, UEL, VNU HCMC

Learning Outcomes
• 1. DEFINE exactly what is meant by organizational culture,

and discuss the interaction of national and MNC cultures.
• 2. IDENTIFY the four most common categories of
organizational culture that have been found through
research, and discuss the characteristics of each.
• 3. PROVIDE an overview of the nature and degree of
multiculturalism and diversity in today’s MNCs.
• 4. DISCUSS common guidelines and principles that are used
in building multicultural effectiveness at the team and the
organizational levels.
1. What is Organizational Culture?
• Often called an organization’s personality
• In its most basic form, organizational culture can be
defined as the shared values and beliefs that enable
members to understand their roles in and the norms of
the organization.
• Edgar Schein, 1992:
“Organizational culture is 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. “
What is Organizational Culture?
• A shared pattern of beliefs, assumptions and

expectations held by organization members.
• Informs us of what to believe, how to act and make
decisions
• Guides members in how to perceive the artifacts,
environment, norms, roles, values and physical cues
• The strategy, leadership style and ways of
accomplishing tasks reflect organization culture
Edgar Schein, 1992
The Nature of Organizational Culture
• Observed behavioral regularities, as typified by common
language, terminology, and rituals.
• Norms, as reflected by things such as the amount of work to
be done and the degree of cooperation between
management and employees.
• Dominant values that the organization advocates and
expects participants to share, such as high product and
service quality, low absenteeism, and high efficiency.
• A philosophy that is set forth in the MNC’s beliefs regarding
how employees and customers should be treated.
The Nature of Organizational Culture
• Rules that dictate the do’s and don’ts of employee

behavior relating to areas such as productivity,
customer relations, and intergroup cooperation.
• Organizational climate, or the overall atmosphere of the
enterprise as reflected by the way that participants
interact with each other, conduct themselves with
customers, and feel about the way they are treated by
higher-level management
Levels of Organizational Culture
• Aspects of an organization ’ s
Artifacts – symbols of culture that you see, hear, and
culture in the physical feel à Visible, often not
and social work environment decipherable (clothing styles,
posters on the wall..)
Values • Values: These are the

Espoused: what members of “espoused” values – often found
on company websites
an organization say they value
Enacted: reflected in the way
individuals actually behave
• Assumptions: The taken-for-
granted notions. These are the
beliefs that people use to make
Basic Assumptions – deeply held day-to-day decisions within an
beliefs that guide behavior and tell organization. For example, “it is
members of an organization how best to speak up when I have a
to perceive and think about things good idea.” or “Business should
be profitable”.
Layers of Culture
Examples
• Bên trong nơi làm việc tốt nhất Việt Nam http://cafebiz.vn/life-style/ben-
trong-noi-lam-viec-tot-nhat-viet-nam-201403031500098003ca50.chn
• http://www.unilever.com.vn/aboutus/bestemployerofchoice/
• http://www.unilever.com/aboutus/purposeandprinciples/ourprinciples/
• Bí quyết giúp Microsoft thành 'Nơi làm việc tốt nhất ngành phần mềm' Việt
Nam http://cafebiz.vn/cau-chuyen-kinh-doanh/bi-quyet-giup-microsoft-
thanh-noi-lam-viec-tot-nhat-nganh-phan-mem-viet-nam-
2014021815082501310ca57.chn
• Văn hoá doanh nghiệp FPT
http://www.fpt.com.vn/vn/gioi_thieu/gioi_thieu_chung/van_hoa_doanh_nghi
ep/
• http://www.fpt.edu.vn/story/bai-viet-ve-van-hoa-fpt-cua-pho-tg-tap-oan-bui-
quang-ngoc
Examples
• What it is like to work at Google?

• https://www.youtube.com/watch?v=2-xZsltUvYc&t=48s
• Inside Google’s Culture of Success and Employee Happiness
• https://blog.kissmetrics.com/googles-culture-of-success/
Functions of Organizational Culture
• Culture provides a sense of identity to members and

increases their commitment to the organization
• Culture is a sense-making device for organization
members
• Culture reinforces the values of the organization
• Culture serves as a control mechanism for shaping
behavior
How Organizational
Cultures Form
Philosophy Top
of the Management
Organization’s
Founders:
Organizational
Selection
Ben & Jerry, Culture
Herb Kelleher,
Bill Gates
Socialization
12
Understanding
Organizational Culture
Antecedents Organizational Organizational Group & Social

Culture Structure & Processes
• Founder’s values Practices • Socialization
• Observable artifacts
• Industry & business • Reward systems • Mentoring
environment
• National culture • Organizational • Decision
• Espoused values making
• Senior leaders’ design
vision and behavior • Group
• Basic assumptions dynamics
• Communication
Collective • Influence &
Attitudes & empowerment
Organizational Behavior • Leadership
Outcomes
• Work attitudes
• Effectiveness
• Job satisfaction
• Innovation &
stress • Motivation
2. Interaction Between National and
Organizational Cultures
• From Hofstede’s research:
– National cultural values of employees may have a
significant impact on their organizational performance
– Cultural values employees bring to the workplace with
them are not easily changed by the organization
Case study: Wal-Mart in Germany
1. This Is Not America. Why Wal-Mart left German http://www.atlantic-
times.com/archive_detail.php?recordID=615
2. Wal-Mart Finds That Its Formula Doesn’t Fit Every Culture
http://www.nytimes.com/2006/08/02/business/worldbusiness/02walm
art.html?pagewanted=all&_r=0
3. Walmart’s Downfall in Germany: A Case Study
http://journalofinternationalmanagement.wordpress.com/2011/05/16/
walmarts-downfall-in-germany-a-case-study/
4. World's Biggest Retailer Wal-Mart Closes Up Shop in Germany
http://www.dw.de/worlds-biggest-retailer-wal-mart-closes-up-shop-in-
germany/a-2112746-1
5. Walmart Leaves Germany: Blame Smiles, Love or Plastic Bags?
http://www.treehugger.com/corporate-responsibility/walmart-leaves-
germany-blame-smiles-love-or-plastic-bags.html
Case study: Wal-Mart
1. In June 2007, what happened to Wal-Mart in Germany?
2. In which year did Wal-Mart enter the German market?
3. Do German customers like Wal-Mart's employees smile at them?
4. Does Wal-Mart ban the love between co-workers in the
company?
5. Do German customers like Wal-Mart's employees helping them
packing goods?
6. In which year did Wal-Mart leave the German market?
7. List all the reasons why Wal-Mart failed in Germany and South
Korea?
Cultural Variations
Table 6–1
Dimensions of Corporate Culture
Motivation
Activities Output
To be consistent and precise. To strive To be pioneers. To pursue clear aims and
for accuracy and attention to detail. To objectives. To innovate and progress. Go
refine and perfect. Get it right. for it.
Relationship
Job Person
To put the demands of the job before To put the needs of the individual before
the needs of the individual. the needs of the job.
Identity
Corporate Professional
To identify with and uphold the expecta- To pursue the aims and ideals of each
tions of the employing organization. professional practice.
Adapted from Table 6.1: Dimensions of Corporate Culture

Cultural Variations
Table 6–1
Communication
Open Closed
To stimulate and encourage a full and To monitor and control the exchange and
free exchange of information and accessibility of information and opinion.
opinion.
Control
Tight Loose
To comply with clear and definite To work flexibly and adaptively according
systmes and procedures. to the needs of the situation.

Cultural Variations
Table 6–1
Conduct
Conventional Pragmatic
To put the expertise and standards of To put the demands and expectations of
the employing organization first. To do customers first. To do what they ask.
what we know is right.
Source: Reported in Lisa Hoecklin, Managing Cultural Differences: Strategies for Competitive
Advantage (Workingham, England: Addison-Wesley, 1995), p. 146.

European’s Perceptions of Cultural Dimensions
of U.S. Operations/Same MNC
Activities Outputs
Job Person
Open Closed
Tight Loose
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
European’s Perceptions of Cultural Dimensions
of European Operations/Same MNC
Activities Outputs
Job Person
Open Closed
Tight Loose
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
3. Organizational Cultures in MNCs
• There are four steps in the integration of organizational
cultures in international expansions that result from
mergers or acquisition
1. The two groups have to establish the purpose, goal, and focus
of their merger
2. They have to develop mechanisms to identify the most
important organizational structures and management roles
3. They have to determine who has authority over the resources
needed for getting things done
4. They have to identify the expectations of all involved parties and
facilitate communication between both departments and
individuals in the structure
Organizational Cultures in MNCs
• Three aspects of organizational functioning that are

important in determining MNC organizational culture
1. The general relationship between the employees
and their organization
2. The hierarchical system of authority that defines the
roles of managers and subordinates
3. The general views that employees hold about the
MNC’s purpose, destiny, goals, and their places in
them.
• Handy’s
classification
(1999):
– Power culture
– Role culture
– Task culture
– Person culture
• Trompenaar’s
classification:
– Family culture
– Eiffel Tower culture
– Guided Missile
culture
– Incubator culture
Trompenaar’s
Equity
Fullfillment-oriented Project-oriented
culture culture
INCUBATOR GUIDED MISSILE

Person Task
Emphasis Emphasis
FAMILY EIFFEL TOWER
Power-oriented Role-oriented
culture culture
Hierarchy
Adapted from Figure 6–2: Organizational Cultures

• Family culture FAMILY

– Strong emphasis on hierarchy and
orientation to the person Power-oriented
– Family-type environment that is power culture
oriented and headed by a leader who is
regarded as a caring parent
n Management looks after employees, and tries to ensure that they

are treated well and have continued employment
n May catalyze and multiply the energies of the personnel or end up
supporting a leader who is ineffective and drains their energies
and loyalties
EIFFEL TOWER
Role-oriented
culture
• Eiffel Tower
EIFFEL TOWER
– Strong emphasis on hierarchy and
orientation to the task
Role-oriented
– Jobs are well defined, and everything is
culture
coordinated from the top
– This culture is narrow at the top, and
broad at the base
n Relationships are specific, and status remains with the job.
n Managers seldom create off-the-job relationships with their
people, because they believe this could affect their rational
judgment
n This culture operates very much like a formal hierarchy—
impersonal and efficient and loyalties
Project-oriented
culture
GUIDED MISSILE
• Guided missile
– Strong emphasis on equality in the Project-oriented
workplace and orientation to the task culture
– This culture is oriented to work

– Work typically is undertaken by teams or GUIDED MISSILE
project groups
n In projects, formal hierarchical considerations are given low
priority, and individual expertise is of greatest importance
n All team members are equal (or at least potentially equal
n All teams treat each other with respect, because they may need
the other for assistance
n Egalitarian and task-driven organizational culture
Fullfillment-oriented
culture
INCUBATOR
• Incubator
– Strong emphasis on equality and Fullfillment-oriented
culture
personal orientation
– Based on the premise that organizations
INCUBATOR
serve as incubators for the self-
expression and self-fulfillment of their
members
n Little formal structure

n Participants in an incubator culture are there primarily to perform
roles such as confirming, criticizing, developing, finding resources
for, or helping to complete the development of an innovative
product or service
Four Corporate Cultures
Table 6–3
Summary Characteristics of the Four Corporate Culture
Corporate Culture
Characteristic Family Eiffel Tower Guided Missile Incubator
Relationships Diffuse relation- Specific role in Specific tasks in Diffuse,
between ships to organic mechanical cybernetic system spontaneous
employees whole to which system of targeted on relationships
one is bonded required shared objectives growing out of
interaction shared creative
process
Attitude toward Status is ascribed Status is ascribed Status is achieved Status is achieved
authority to parent figures to superior roles by project group by Individuals
who are close and that are distant members who Exemplifying
powerful yet powerful contribute to creativity and
targeted goal growth
Ways of thinking Intuitive, holistic, Logical, analytical, Problem centered, Process oriented,
and learning lateral and error vertical, and professional, creative, ad hoc,
correcting rationally efficient practical, cross inspirational
disciplinary
Adapted from Table 6–3: Summary Characteristics of the Four Corporate Culture
Table 6–3
Corporate Culture
Attitudes toward Family members Human resources Specialists and Co-creators
people experts
Ways of changing “Father” changes Change rules and Shift aim as target Improvise and
Course procedures moves attune
Ways of Intrinsic Promotion to Pay or credit for Participation in
motivating and satisfaction in greater position, performance and the process of
rewarding being loved and larger role problems solved creating new
respected realities
Management by Management by Management by Management by
subjectives job description objectives enthusiasm
Table 6–3
Corporate Culture
Criticism and Turn other cheek, Criticism is Constructive task Improve creative
conflict resolution save other’s face, accusation of related only, then idea, not negate it
do not lose power irrationalism admit error and
game unless there are correct fast
procedures to
arbitrate conflicts
Source: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding
Diversity in Global Business, 2nd ed. (Burr Ridge, IL: Irwin, 1998), p. 183.
3. Phases of Multicultural Development
Table 6–4
The Evolution of International Corporations
Phase I Phase II Phase III Phase IV
Characteristics/ (Domestic (International (Multinational (Global
Activities Corporations) Corporations) Corporations) Corporations)
Primary Product/service Market Price Strategy orientation
Competitive Domestic Multidomestic Multinational Global strategy

Importance of Marginal Important Extremely Dominant world
business important
Product/service New, unique More Completely Mass-customized
standardized standardized
(commodity)
Product Process Engineering not Product and
engineering engineering emphasized process
emphasized emphasized engineering
Adapted from Table 6–4: The Evolution of International Corporations

Phases of Multicultural Development
Table 6–4
Technology Proprietary Shared Widely shared Instantly and
extensively
shared
R&D/sales High Decreasing Very low Very high
Profit margin High Decreasing Very low High, yet
immediately
decreasing
Competitors None Few Many Significant (few
or many)
Market Small, domestic Large, Larger, Largest, global
multidomestic multinational
Production Domestic Domestic and Multinational, Imports and location
primary markets least cost exports

Table 6–4
Exports None Growing, high Large, saturated Imports and
potential exports
Structure Functional Functional with Multinational lines Global alliances,
divisions international of business hierarchy
division
Centralized Decentralized Centralized Coordinated,
decentralized
Primary Product/service Market Price Strategy orientation
Strategy Domestic Multidomestic Multinational Global
Perspective Ethnocentric Polycentric/ Multinational Global/
regiocentric multicentric

Table 6–4
Cultural Marginally Very Somewhat Critically sensitivity
important important important important
With whom No one Clients Employees Employees and
clients
Level No one Workers and Managers Executives
clients
Strategic “One way”/ “Many good “One least-cost “Many good
assumption one best way” ways” Way” Ways”
equifinality simultaneously
Source: Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent
Publishing, 1991), pp. 7–8.

International Culture Diversity Focus
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.
Types of Multiculturalism
• Domestic multiculturalism
– Multicultural and diverse workforce that operates in
the MNC’s home country
• Group multiculturalism
– Homogeneous groups
– Token groups
– Bicultural groups
– Multicultural groups
Potential Problems Associated
with Diversity
• Attitudinal problems
– May cause a lack of cohesion that results in the
unit’s inability to take concerted action or to be
productive
• Perceptual problems
– When culturally diverse groups come together, they
often bring preconceived, erroneous stereotypes
with them
• Inaccurate biases.
• Inaccurate communication
Advantages of Diversity
• Can enhance creativity, lead to better decisions, and

result in more effective and productive performance
• Can prevent groupthink
– Social conformity and pressures on individual
members of a group to conform and reach
consensus
• Can be very effective team under right conditions
– Tasks requiring innovativeness
– Activities must be determined by the stage of team
development
Understanding the Conditions for
Effectiveness
Highly Average Highly

ineffective effectiveness effective
Adapted from Figure 6–5: Group Effectiveness and Culture

Guidelines for Effectively Managing
Culturally Diverse Groups
1. Select team members for their task-related abilities
2. Team members must recognize and be prepared to deal
with their differences
3. Team leader must help the group to identify and define its
overall goal
4. Members must have equal power so that everyone can
participate in the process
5. All members must have mutual respect for each other.
6. Managers must give teams positive feedback on their
process and output
Review questions
1. Some researchers have found that when Germans work for a U.S. MNC,
they become even more German, and when Americans work for a
German MNC, they become even more American. Why would this
knowledge be important to these MNCs?
2. In which of the four types of organizational cultures— family, Eiffel Tower,
guided missile, incubator—would most people in the United States feel
comfortable? In which would most Japanese feel comfortable? Based on
your answers, what conclusions could you draw regarding the importance
of understanding organizational culture for international management?
3. Most MNCs need not enter foreign markets to face the challenge of
dealing with multiculturalism. Do you agree or disagree with this
statement? Explain your answer.
4. What are some potential problems that must be overcome when using
multicultural, diverse teams in today’s organizations? What are some
recognized advantages? Identify and discuss two of each.

Chapter 3 Organizational Culture Diversity

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Chapter 3

ORGANIZATIONAL CULTURE &

Tra T Ngo, 2021, UEL, VNU HCMC

• 1. DEFINE exactly what is meant by organizational culture,

• A shared pattern of beliefs, assumptions and

• Rules that dictate the do’s and don’ts of employee

Values • Values: These are the

• What it is like to work at Google?

• Culture provides a sense of identity to members and

Antecedents Organizational Organizational Group & Social

Adapted from Table 6.1: Dimensions of Corporate Culture

Adapted from Table 6.1: Dimensions of Corporate Culture

Adapted from Table 6.1: Dimensions of Corporate Culture

• Three aspects of organizational functioning that are

INCUBATOR GUIDED MISSILE

Adapted from Figure 6–2: Organizational Cultures

• Family culture FAMILY

n Management looks after employees, and tries to ensure that they

– This culture is oriented to work

n Little formal structure

Competitive Domestic Multidomestic Multinational Global strategy

Adapted from Table 6–4: The Evolution of International Corporations

Adapted from Table 6–4: The Evolution of International Corporations

Adapted from Table 6–4: The Evolution of International Corporations

Adapted from Table 6–4: The Evolution of International Corporations

Phase1 Phase2 Phase3 Phase4

Domestic International Multinational Global firms

• Can enhance creativity, lead to better decisions, and

Highly Average Highly

Adapted from Figure 6–5: Group Effectiveness and Culture

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