Chapter Six

Organizational Cultures
and Diversity

McGraw-Hill/Irwin

Copyright 2012 by The McGraw-Hill Companies, Inc. All Rights Reserved.

Organizational Cultures and

Diversity

The specific objectives of this chapter are to

1. DEFINE 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 and discuss characteristics of
each.
3. PROVIDE an overview of the nature and degree
of multi-culturalism and diversity in todays MNCs.
4. DISCUSS common guidelines and principles used
in building team and organizational multicultural
effectiveness.
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The Nature of
Organizational Culture
Organizational culture
Shared values and beliefs enabling members to
understand their roles and the norms of the
organization, including:
Observed behavioral regularities, typified by
common language, terminology, rituals
Norms, reflected by things such as the amount
of work to do and the degree of cooperation
between management and employees
Dominant values that the organization
advocates and expects participants to share
low absenteeism, high efficiency
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The Nature of
Organizational Culture
Other values and beliefs
Philosophy set forth regarding how to treat
employees and customers
Rules dictating dos and donts of employee
behavior pertaining to productivity, intergroup
cooperation, and customer relations
Organizational climate as reflected by the way
participants interact with each other, treat
customers, and feel about how they are treated by
senior level management

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Interaction between
National and Organizational Cultures
National cultural values of employees may
significantly impact their organizational
performance
Cultural values employees bring to the
workplace are not easily changed by the
organization

6-5

Dimensions of Corporate Culture

6-6

European Perceptions of the Cultural

Dimensions of U.S. Operations and
European Operations of the same MNC

6-7

European Management
Characteristics

6-8

Organizational Cultures in MNCs

Shaped by numerous factors including cultural
preferences of leaders and employees
Some MNCs have subsidiaries that (aside
from logo and reporting procedures) wouldnt
be easily recognizable as belonging to the
same MNC

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Organizational Culture in MNCs

There are four critical steps to successfully integrate

organizational cultures after international expansion
via mergers/acquisitions:
1. The two groups establish the purpose, goals, and
focus of their merger
2. Then, mechanisms are developed to identify most
important structures and manager roles
3. Next, the groups determine who has authority
over resources
4. Finally, the expectations of all involved
participants are identified communication
between departments and individuals is facilitated
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Organizational Cultures

6-11

Organizational Cultures in MNCs

Family Culture
Family Culture
Strong emphasis on hierarchy and orientation to
persons.
Power oriented, headed by leader regarded as
caring parent
Management takes care of employees,
ensures theyre treated well, and have
continued employment
Catalyze and multiply energies of personnel or
end up supporting leader who is ineffective
and drains energy and loyalties

6-12

Organizational Cultures in MNCs

Eiffel Tower Culture
Eiffel Tower Culture
Strong emphasis on hierarchy and orientation to
task
Jobs well defined; coordination from top
Culture narrow at top; broad at base
Relationships are specific and status remains
with the job
Few off-the-job relationships between
manager and employee
Formal hierarchy is impersonal and efficient

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Organizational Cultures in MNCs

Guided Missile Culture
Guided Missile Culture
Strong emphasis on equality in workplace and in
task
Culture oriented to work
Work undertaken by teams or project groups
All team members equal
Treat each other with respect
Egalitarian and task-driven organizational
culture

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Organizational Cultures in MNCs

Incubator Culture
Incubator Culture
Strong emphasis on equality and personal
orientation
Organization as incubator for self-expression
and self fulfillment
Little formal structure
Participants confirm, criticize, develop, find
resources for, or to help complete the
development of an innovative product or
service

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National Patterns
of Corporate Culture

6-16

Managing Multiculturalism
and Diversity
Both domestically and internationally,
organizations lead workforces with a variety of
cultures consisting of largely diverse
populations
Women and Men
Young and Old
Black, White, Latin, Asian, Arab, Indian
Many others

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The Evolution of
International Corporations

6-18

Locations of International
Cross-Cultural Interaction

6-19

Types of Multiculturalism
Domestic Multiculturalism
Multicultural and diverse workforce operating in
MNC home country

Group Multiculturalism
Homogenous groups
Token groups
Bicultural groups
Multicultural groups

6-20

Potential Problems
Associated with Diversity
Perceptual problems
When cultural diverse groups come together, they often bring
preconceived, erroneous stereotypes with them

Inaccurate biases
Inaccurate communication
Attitudinal problems
May cause lack of cohesion resulting in units inability to take
concerted action or be productive

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Advantages of Diversity
Enhances creativity
Leads to better decisions
Generates more effective/productive results
Prevents groupthink
Can facilitate highly effective teams under right
conditions

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Building Multicultural Team

Effectiveness
Select team members for task-related abilities, not
solely based on ethnicity
Team members must recognize and be prepared to
deal with their differences
The team leader must help identify/define the overall
goal
Mutual respect among members is critical
Managers must give team positive feedback on
process and output

6-23