Organizational Culture – Shared values and beliefs that enable members to understand their roles and norms of the organization.

Characteristics associated with an organizations culture:1. Behavioral regularities, common language, rituals.2. Understanding of cooperation between management and employees.3. Common Values.4. Beliefs on how employees are to treat customers.5. Declared rules and boundaries for employees.6. Organizational climate, as reflected by the way participants interact with

each other.

“Near death experiences are very healthy for companies” – David Coe

•No one at BMW can remember any layoffs-ever.•Ideas bubble up freely, there is never a penalty for proposing a new way of doing things.•Workers are inculcated with a sense of place, history, and mission.•There are so many choices that line workers assemble exactly the same car only about once every 9 months.

http://www.youtube.com/watch?v=n7kG5nYDyYY

Interaction Between National and Organizational Cultures

When National Companies hire locals it appears that they gain national pride. “Germans become more German, Americans become more American”

Organizational culture clashes often occur when a purchasing company does not fully understand the true operations of the business acquired.

Why would this knowledge be important to the MNCs?

Example: DaimlerChrysler with Nissan and Mitsubishi.

Dimensions of Corporate Culture – pg.161

When cultural comparisons were made between different subsidiaries of an MNC, different cultures often existed in each one.

This could reduce the ability of units to work well together.

Doing things the Wal-Mart Way

Walmart’s miscommunication and lack of understanding German society led to them vacating Germany in 2006

4 Steps of the Integration of Organizational Cultures:1. The two groups have to establish the purpose, goal, and

focus of their merger.2. Then 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

Trompenaars’ Four Types of Organizational Culture:1. Family – hierarchy/person2. Eiffel Tower – hierarchy/task3. Guided Missile – equality/task4. Incubator – equality/person

People – management feels an emotional sense of obligation takes care of employees

Task – Look for the best qualified to do the task. Make sure the task gets done well and on time.

Equality – More freedom and interaction with different levels of employees.

Hierarchy – Rigid fixed structure of management with communication mainly from the top-down.

Family culture – Characterized by a strong emphasis on hierarchy and orientation to the person.•Common in…Turkey, Pakistan, Venezuela, China, Hong Kong, and Singapore.•Personnel look to individuals in charge for both guidance and approval.

• Eiffel Tower Culture• Task/Hierarchy• Jobs are coordinated from the top• Very little upward communication• Everyone knows what they are supposed to do and they do it• Impersonal and efficient• Examples: Germany

• http://daniel-workman.suite101.com/german-culture-leadership-style-a50346

• Rule based system. Adapts poorly to change (manuals must be rewritten, job descriptions altered… etc.)

• Guided Missile Culture• Task/Equality• Do whatever it takes to get the job done• Individual expertise is important• Change teams often and fast when projects are

done• Examples: Book says US and UK• Examples: Article says Japan

• http://daniel-workman.suite101.com/japanese-corporate-culture-a46664

• Japanese make decisions in groups (equality) when US managers are held individually accountable for decisions.

• Japanese work on the honor system, focusing more on relationships with informal control mechanisms.

• Japanese took Guided Missile culture abroad• “Japan has successfully implemented its guided missile

project culture around the world. For example, Japan’s Toyota automotive plant in Cambridge, Ontario (Canada) continuously encourages front-line workers to suggest improvements to Toyota’s component-based, vehicle assembly”

• Where does the USA fit into these cultures?• Where does Japan fit into these cultures?• Why would it be so important to understand

these differences?

• Incubator Culture• Person/Equality• Organizations exist to help employees achieve self-

fulfillment • Entrepreneurs – creativity is encouraged• All employees work to the same objective

• Example: Silicon Valley, CA (entrepreneurial)• Example:

http://www.xconomy.com/seattle/2010/02/04/seattle-needs-an-incubator-culture/?single_page=true

• Seattle needs more of an incubator culture in the Biotechnology fields. There are too many entrepreneurs and too few willing to invest (government and angel networks)

Managing Multiculturalism and Diversity

• Four types of multicultural development• Domestic – “Mom and Pop” shops at home• International – Do business overseas import and export.

Have little investment overseas. • Multinational – Invest in foreign countries. Export a lot.

Exports match each market’s needs. • Global – Companies at home and abroad with a diverse

workforce everywhere. Have invested and are present in many countries. Generally one corporate office and one marketing strategy for all business deals.

Walmart• Example of Multinational Corporation• Walmart is the “largest retailer and largest multinational

corporation (MNC) in the world based on revenue. ”• “Walmart operates in 44 countries, has 2,276 stores outside

of the U.S.”• “$56.3 billion in sales overseas” (based off numbers from

2006)• Walmart is growing quickly because of competitive electronics

• Notable multinational culture because it fits its products to the markets’ needs

• http://www.msnbc.msn.com/id/10838942/ns/business-forbes_com/t/wal-mart-takes-over-world/#.T02G5pgTtdg

Global Organizations

• The Coca-Cola Company“Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more

than 500 brands in over 200 countries or territories”“Coca-Cola Company has its headquarters in Georgia and only produces syrup

concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory”

• McDonald’s“ McDonald's restaurants are found in 119 countries with 31,000 stores.”Owners must be a franchisee or an affiliate with the companyMcDonald’s used to display American brand equity, but now it adapts

marketing strategies to local territories.http://www.youtube.com/watch?v=v6coDUDCJ10

Types of Multiculturalism• Domestic

– diversity exists within countries– ex. French and Flemish in Belgium– occurs within same ethnic group

• Group1. homogenous2. token3. bicultural4. Multicultural

• Most MNCs don’t need to enter foreign markets to face that challenge of dealing with multiculturalism. Agree/Disagree? Explain.

Brainstorming Questions

• Can you name some disadvantages that multicultural, diverse teams deal with in today’s corporations?

• What are some advantages that diverse teams possess?

Disadvantages of Diversity

• lack of cohesion• inaccurate communication

– time perception– interpretation

• attitudinal problems– ex. mistrust of others

• stereotyping– http://www.youtube.com/watch?v=9aVUoy9r0CM&feature=related

Advantages of Diversity

• generation of more and better ideas• beneficial to have representatives from

different nationalities• prevention of groupthink

– slower consensus

Building Multicultural Team Effectiveness

• diverse groups are more powerful than single-cultural groups

• most effective when tasks require innovation• effective if development stage is known

Management Guidelines

1. selection based on ability not ethnicity2. preparation for handling differences is key3. leader must clearly define goals4. equal power5. mutual respect 6. provide feedback

NUMMI PrinciplesExample of a successful world class organization using this

approach:1. interdependence led to shared vision2. employees treated fairly enabled them to become

contributors3. interdependent relationships created a healthy work

environment4. production system created trust and mutual respectWhat are some potential problems that must be overcome

when using multicultural, diverse teams in today’s organizations, AND what are some advantages?

Case: A Good Faith Merger

• Main organizational cultural differences?• Why might the U.S. firm be more culturally

diverse than the Spanish firm? • Problems from this?

• How would you effectively merge the two cultures?

• Examples?