309 Cross-cultural management
Implications of culture on organizations, management and leadership
31.10.2002 Stina Immonen


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  

Advancements in CCM research


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   .

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 .

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 .

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  .

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 .

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 .

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

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 .Approaches to study cross-cultural management  Foreign national.

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

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 .

matching the structure to the decision-making less focus on the structure. transnationals.decentralization  Global division   Matrix  joint authority of geographical and product divisions. networks  .Stages of internationalization (Dowling et al. 1999)  Parent-subsidiary companies  direct control parent-country nationals as managers host-country  International division  ethnocentric approach with local expertise nationals as managers centralization . more focus on developing the abilities. behavior and performance of individual managers SI/HUT DIEM 2002  Heterarchy.

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

labor relations Host country. 1999. home country. other country HCNs. performance management. training and development.International human resource management three dimensions (Dowling et al. compensation and benefits. staffing. PCNs. TCNs  Countries of operations   Types of employees  SI/HUT DIEM 2002 . Morgan 1986)  Human resource activities  Human resource planning.

 Hofstede s model (1980.g. 1981):  High and low context communication SI/HUT DIEM 2002 .Models of culture e. 1997)     power distance collectivism-individualism uncertainty avoidance masculinity-femininity  Hall (1976.

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

Examples of cultural classifications and their influences on management (Rodrigues. team approach Reliance on formal controls  Small power distance   Collectivism Individualism    SI/HUT DIEM 2002 . 1996)  Large power distance  Authoritative decisionmaking and leadership styles Participative and consultative styles Reliance on informal controls.

 Strong uncertainty avoidance Weak uncertainty avoidance Masculinity  Mechanistic organization Organic organizational structures Equal employment opportunities maybe resisted by males Equal employment opportunities less resisted      Femininity  SI/HUT DIEM 2002 .

English. Chinese.g. Scandinavian. Vietnamese. Swiss. Arab. High-context cultures (e. Spanish culture)  Business transactions and negotiations are slow in pace  Low-context cultures (e. North American. Greek. Japanese. Korean. German culture)  Business transactions and negotiations are fast in pace SI/HUT DIEM 2002 .g. Italian.

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

g speed of messages.Multi-cultural teams  Definition   team members are from more than one national culture often members represent different organizational/ professional cultures more to do with realizing right responses than sending the right messages cultural awareness and language to use the verbal and non verbal symbols   Communication   e. importance of completion differ accross cultures (Hall & Hall 1989) attitude towards conflict and risk SI/HUT DIEM 2002 . context. information flow.

2001) aims to strengthen motivation and commitment to organization   relationship oriented leadership task oriented leadership  degree of empowerment. participation in decisionmaking SI/HUT DIEM 2002 .Multi-cultural teams  Leadership   rather to apply different leadership styles than to try to find synergy between different national cultures (Mäkilouko.

Montebello (1994) and Jassawal & Sashittal (1999) G roup E fficiency Stages of Team Developm ent Cycle Immature Group .Norming * consensus * leadership accepted * trust established * standards set * new stable rules * co-operation Effective Group . acceptance Disbanding Group .Adjourning * disagreement * anxiety about separation and ending * positive feeling towards leader * sadness * selfevaluation Tim e SI/HUT DIEM 2002 .Storming * disagreement over rules * struggle for leadership * tension * hostility * clique formation Sharing Group .Adapted from Tuckman (1965). desillusion.Forming * confusion * uncertainty * assessing situation * testing ground rules * feeling out others * defining goals * getting acquainted * establishing rules Fractionated Group . Katzenbach & Smith (1993).Performing * successful performance * flexible task roles * openness * helpfulness * delusion.

transparent decisions and actions. ability to collaborate for synergy Willingness to learn fro tea experience. setting Process up goals Y LE P rfor i g ffective utilisation of skills. otivations and interests. and i prove perfor a nce     ¡   ¢ ¢ ¢ ¡ £       £   ¦ ¥¦ ¥    £ . reliance to ards others Co it e nt to tea . agreed rules and perfor ance easure ent Adjour i g valuation. revie ing and re arding. shared or individualised leadership depending on task Tolerance to ards diversity. CF team success factors from AIRBUS case AM LIFE For i g Increased Team Development co unication and interaction. co patible infor a tion syste s and soft are e rfor ance anage ent and onitoring syste s a ta archives for future needs. disse inating learning experiences 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 SI/HUT DIEM 2002 ¦ ¦¦ ¦ ¥ ¦ ¦ ¦  ¦ ¦¦ ¦ IT Support Needed Coherency in IT supported co unication ¦ ¦ ¦ ¨ § Net ork. integration ith other tea s Stor i g Understanding of constraints. defining responsibilities and roles. negotiation skills ffective use of co unication edia Nor i g Trust. closing cere onies.MC. kno ledge anage ent syste for organisational/ project e ory ¤ ¤ ¤ © ¤ ¤ ¤ ¤¤ £ Social skills and Team kno ledge of Qualifications languages Tolerance to ards uncertainty.

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

emergent market or mature operation Cultural adjustment: the U-curve SI/HUT DIEM 2002 . country-cultural requirements. language. cross-cultural suitability. family requirements. 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.Expatriate performance        Selection: technical skills.

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 .

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 .

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

CCM research at HUT DIEM SI/HUT DIEM 2002 .

199596. 1992-93 impact of organizational and national culture on management practices and organizational design.Examples on cross-cultural management research at HUT DIEM Research themes  Culture s impact on experienced employee wellbeing (Järvenpää et al. 1997. 1993. 1996)   comparison of experienced job content and job stress between Finnish and US office workers. surveys SI/HUT DIEM 2002 . Finnish and US public and private sector CCM understanding on occupational group. organizational and industry level by comparative studies. Järvenpää & Immonen.

Examples on cross-cultural management research at HUT DIEM Research themes  Culture s impact on managerial behavior (Immonen et al. 1996)  comparison of US and Finnish managers on time spent on interaction. Hyttinen & Immonen. 1994. Järvenpää & Immonen. 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 . 1994.

surveys. interviews. 2000.Examples on cross-cultural management research at HUT DIEM Research themes  Management of networked organizations (Immonen & Järvenpää. site visits SI/HUT DIEM 2002 . 1998. 2000)   organization culture and leadership in networked electronics industry. 1998-2000 CCM understanding on geographically dispersed operations and global integration Case study approach. Thomas et al. documentation. Pinson et al. 1998-99 cross-cultural challenges of de-located product development.

interviews.Examples on cross-cultural management research at HUT DIEM Research themes  Challenges of international interaction on global business. site visits SI/HUT DIEM 2002 . Järvenpää & Immonen. organizational and individual level. documentation.al 2001. 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.(Teerikangas et. 2001.

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2001. SI/HUT DIEM 2002 . Albi. March 1116. Dresden: Dresden University of Technology.pdf Tuckman.. M. H. A.R.3 http://www. Rodrigues. Group and Organisational Studies. (1998) Cultural classification of societies and how the affect cross-cultural management. Wagner (toim. S.43-47 Pinson. August 26-28.. S. (1996) Cross-cultural aspects in job stress and managerial behavior. J. & Ylitalo.aerospatiale. A paper presented at the 6th Workshop in international business at the University of Vaasa. C. (2001) Leading multinational project teams: Forman. S.avions. (1986) International human resource management.. 29-39. P. Riekkinen.. Dissertation.4.. USA..fr/muscles/anglais/DELIVERABLES/2-43%20Description%20of%20team%20life%20cycle_vB. A paper accepted to be published in Proceedings of the Project Management Global Conference.4%20humanresources_vB. 31.aerospatiale. MUSCLES Technical Document. S. 1-10. E. Best Sellers Publishing. Järvenpää. Task 2. E. S. Fact or Fiction. (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). country specific perspective. 419-427.4.9.1. Montebello. In W. B. Immonen. (2000) Description of a team life cycle.fr/muscles/anglais/DELIVERABLES/2. M. pp. Task 2.. Teerikangas. L. (2002) Challenges of cross-cultural management: Case studies in Finnish companies. S. & Jensen.pdf Mäkilouko.1. 2ème Congrès International Franco-Québécois.) Analysis and design of mental work. Carayon. Thomas.C. & Immonen. Immonen.References            Järvenpää. (1994) Work teams that work: skills for managing across the organization. E.avions. Hong Kong. MUSCLES Technical Document.. P. E. Richter. Järvenpää. Harmer. Carver. 5:3. 2002. September 3-5 1997. France: Ecole des Mines d Albi. Personnel Administrator. 2. V. Cross Cultural Management. Hacker. E. http://www.A. In Industrial Engineering in a world without borders. (2000) Models for analysing human resources and organisation.W. & Bröcker A. A. & T. Finland. S. (1977) Stages of Small Group Development Revisited.. Morgan. & Immonen. (2001) The impact of culture on Finnish project business: case of a Sino-Finnish joint venture.. Derjami-Bayeh. Tampere University of Technology Publications 343. P. and Immonen. Järvenpää.

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