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General issues in Organization behavior, O.

B across cultures
Chapters 2 & 3; Session 2

Study Questions
What is a high-performance organization? What is Human capital and how organizations

achieve competitive advantage? What are the dimensions of high involvement management? What is multiculturalism, and how can workforce diversity be managed? Why is globalization significant for organizational behavior? What is culture and how can we understand cultural differences How does cultural diversity affect people at work?

Modern Organization Designs

Communication Technology Globalization

Transportation Technology

Effects of Globalization

Demographic Change

Cultural Change

Communication Technology Globalization

Diversity

Transportation Technology

Globalization and its impact on organizations


Demographic Change Cultural change
Diversity Globalization Transportation Technology

Flexibility

Communication Technology

Impact of Globalization On organizations

Demographic Change
Flexibility Cultural Change Communicatio n technology Globalization Transportation technology Hyper Competition Faster pace of change Diversity

Globalization And Development of New Organization Designs


Demographic Change Flexibility

Cultural Change Communication Technology

Diversity
Transportation Technology Globalization

Hyper Competition

Smaller, flatter, networked organizations

Faster pace of innovation

High Performance Organizations


High Performance organizations (HPO) are designed to bring out the best in people and produce sustainable organizational results

High-performance organizations.
Value and empower people, and respect

diversity. Mobilize the talents of self-directed work teams. Use cutting-edge technologies to achieve success. Thrive on learning and enable members to grow and develop. Are achievement-, quality-, and customeroriented, as well as being sensitive to the external environment.

High-performance organizations
Stakeholders. The individuals, groups, and other organizations affected by an organizations performance. Value creation. The extent to which an organization satisfies the needs of strategic constituencies.

High-performance organizations
Total quality management (TQM). A total commitment to:
High-quality results. Continuous improvement. Customer satisfaction.

Meeting customers needs. Doing all tasks right the first time. Continuous improvement focuses on two questions:
Is it necessary?
If so, can it be done better?

High-performance organizations
Human capital. The economic value of people with job-relevant abilities, knowledge, ideas, energies, and commitments. Knowledge workers. People whose minds rather than physical capabilities create value for the organization. Intellectual capital. The performance potential of the expertise, competencies, creativity, and commitment within an organizations workforce.

High-performance organizations
Empowerment. Allows people, individually and in groups, to use their talents and knowledge to make decisions that affect their work.

Social capital. The performance potential represented in the relationships maintained among people at work.

High-performance organizations
Learning and high-performance cultures. Uncertainty highlights the importance of organizational learning. High-performance organizations are designed for organizational learning. A learning organization has a culture that values human capital and invigorates learning for performance enhancement.

Human Capital and Competitive Advantage


Human capital: The sum of the skills, knowledge, and general attributes of the people in an organization Competitive advantage: An advantage enjoyed by an organization that can perform some aspect of its work better than competitors or in a way that competitors cannot duplicate such that it offers products/services that are more valuable to customers

Human Capital as Source of Competitive Advantage


Competitive Advantage
Human Capital Value Associates are capable of performing the basic work of the organization Human Capital Rareness Skills and talents of associates are unique in the industry Human Capital Imitability Skills and talents of associates cannot be copied by other organizations

Human Capital as Source of Competitive Advantage


Are human resources in the firm . . .
Valuable No Yes No Rare Supported by effective Difficult to management imitate Competitive implications Competitive Disadvantage Competitive Parity Temporary Competitive Advantage Sustained Competitive Advantage Performance Below Normal Normal

Yes

Yes

No

Above Normal

Yes

Yes

Yes

Above Normal

Exhibit 1.2 Human Capital and Competitive Advantage Source: Adapted from J. Barney and P. Wright, On Becoming a Strategic Partner, Human Resource Management 37 (1999): 3146.

Dimensions of High-Involvement Management


Exhibit 1.3 Aspect Selective Hiring Dimensions of High-Involvement Management Description Large pools of applicants are built through advertising, word of mouth, and internal recommendations. Applicants are evaluated rigorously using multiple interviews, tests, and other selection tools. Applicants are selected on the basis of not only skills but also fit with culture and mission. New associates and managers are thoroughly trained for job skills through dedicated training exercises as well as on-the-job training. They also participate in structured discussions of culture and mission. Existing associates and managers are expected or required to enhance their skills each year through in-house or outside training and development. Often, existing associates and managers are rotated into different jobs for the purpose of acquiring additional skills.

Extensive Training

Exhibit 1.3 Dimensions of High-Involvement Management

Dimensions of High-Involvement Management


Exhibit 1.3 Aspect Decision Power Dimensions of High-Involvement Management Description Associates are given authority to make decisions affecting their work and performance. Associates handle only those issues about which they have proper knowledge. Lower-level managers shift from closely supervising work to coaching associates. In addition to having authority to make certain decisions, associates participate in decisions made by lower-level and even middle managers.

Information Sharing Associates are given information concerning a broad variety of operational and strategic issues. Information is provided through bulletin boards, company intranets, meetings, posted performance displays, and newsletters. Incentive Compensation Associates are compensated partly on the basis of performance. Individual performance, team performance, and business performance all may be considered.

Exhibit 1.3 Dimensions of High-Involvement Management

High-Involvement Managers
High-involvement managers:
Identify situations in which responsibility can be delegated Manage through encouragement and commitment rather than fear and threats Respect and value each associates skills and knowledge Empower people in ways that are consistent with their uniqueness as individuals Invest effort in building and maintaining trust

Multiculturalism and Diversity


Workforce diversity. Describes differences among people with respect to age, race, ethnicity, gender, physical ability, and sexual orientation. Multiculturalism. Refers to pluralism and respect for diversity and individual differences in the workplace. Inclusivity. The degree to which the organizations culture respects and values diversity.

Multiculturalism and Diversity


Diversity biases in the workplace. Prejudice. Discrimination. The glass ceiling effect. Sexual harassment. Verbal abuse. Pay discrimination.

Multiculturalism and Diversity

Multiculturalism and Diversity


Managing diversity. Developing a work environment and organizational culture that allows all organization members to reach their full potential. A diversity mature organization is created when: Managers ensure the effective and efficient utilization of employees in pursuit of the corporate mission. Managers consider how their behaviors affect diversity. Well-managed workforce diversity increases

human capital.

Global context 0f OB
Most organizations must achieve high

performance within a complex and competitive global environment.


Globalization refers to the complex

economic networks of international competition, resource suppliers, and product markets.

Global context 0f OB
Forces of globalization. Rapid growth in information technology and electronic communication. Movement of valuable skills and investments. Increasing cultural diversity. Implications of immigration. Increasing job migration among nations. Impact of multicultural workforces

Global context 0f OB
Globalization is contributing to the

emergence of regional economic alliances. Important regional alliances.


European Union (EU). North American Free Trade Agreement

(NAFTA). Asia-Pacific Economic Co-operation Forum (APEC).

Global context 0f OB
Outsourcing.
Contracting out of work rather than accomplishing it

with a full-time permanent workforce.

Off shoring.
Contracting out work to persons in other countries.

Job migration.
Movement of jobs from one location or country to

another

Global context 0f OB
Global managers. Know how to conduct business in multiple countries. Are culturally adaptable and often multilingual. Think with a worldview and are able to map strategy in the global context. Have a global attitude. Have a global mindset.

Culture & Cross cultural Understanding


Culture. The learned, shared way of doing things in a particular society. The software of the mind. Helps define boundaries between different groups and affects how their members relate to one another. Cultural intelligence is the ability to identify, understand, and act with sensitivity and effectiveness in cross-cultural situations.

Popular Dimensions of Culture


Language. Perhaps the most visible aspect of culture. Whorfian hypothesis considers language as a major determinant of thinking. Low-context cultures the message is conveyed by the words used. High-context cultures words convey only a limited part of the message. Western cultures are mostly low context cultures Asian and Middle Eastern cultures are low context

Popular Dimensions of Culture


Time orientation. Polychronic cultures.
Circular view of time.
Time is cyclical and goes around and around No pressure for immediate action or performance One will have another chance to pass the same

way again. If opportunity is lost today no problem, it may again return tomorrow. Emphasize present and often do more than one thing at a time

Popular Dimensions of Culture


Time orientation. (cont.) Monochronic cultures.
Linear view of time. Past is gone, the present is here briefly and future

is almost upon us Create pressure for action and performance. People appreciate schedules and appointments, talk about saving and wasting time Long-range goals and planning is a way for managing future

Use of space. Proxemics. The study of how people use space to communicate. Reveals important cultural differences. Concept of personal space varies across cultures. Personal space can be thought of as the bubble that surround us Arabs and south Americans shorter distance North Americans greater distance Asians even further than North Americans Space is arranged differently in different cultures. In Polychronic cultures space is arranged in such a way that many activities can takes place at a time ( Italian and Spanish towns are arranged around central squares Plazas) In Monochronic cultures ( America) towns have traditional main street laid out in linear fashion

Popular Dimensions of Culture

Popular Dimensions of Culture


Religion.
A major element of culture. Can be a very visible aspect of culture.

Influences codes of ethics and moral

behavior.
Influences conduct of economic matters.

Values and National Culture


Cultures vary in underlying patterns of

values and attitudes. Hofstedes five dimensions of national culture: Power distance. Uncertainty avoidance. Individualism-collectivism. Masculinity-femininity. Long-term/short-term orientation.

Values and National Culture


Power distance. The willingness of a culture to accept status and power differences among members. Respect for hierarchy and rank in organizations. Example of a high power distance culture Indonesia. Example of a low power distance culture Sweden.

Values and National Culture


Uncertainty avoidance. The cultural tendency toward discomfort with risk and ambiguity. Preference for structured versus unstructured organizational situations. Example of a high uncertainty avoidance culture France. Example of a low uncertainty avoidance culture Hong Kong.

Values and National Culture


Individualism-collectivism. The cultural tendency to emphasize individual or group interests. Preferences for working individually or in groups. Example of an individualistic culture United States. Example of a collectivist culture Mexico.

Values and National Culture


Masculinity-femininity. The tendency of a culture to value stereotypical masculine or feminine traits. Emphasizes competition/assertiveness versus interpersonal sensitivity/relationships. Example of a masculine culture Japan. Example of a feminine culture Thailand.

Values and National Culture


Long-term/short-term orientation. The tendency of a culture to emphasize future-oriented values versus present-oriented values. Adoption of long-term or short-term performance horizons. Example of a long-term orientation culture South Korea. Example of a short-term orientation culture United States.

Understanding Cultural Differences


Understanding cultural differences helps in

dealing with parochialism and ethnocentrism.


Parochialism assuming that the ways of ones own

culture are the only ways of doing things. Ethnocentrism assuming that the ways of ones culture are the best ways of doing things.

It is parochial for a traveling American business man to insist that all his business contacts speak English It is ethnocentric for him to think that any one who dines with a spoon instead of knife and fork lacks proper table manners

Understanding Cultural Differences


A frame work developed by Fons Trompenaar offers a vantage point in understanding and dealing with cultural differences He suggests that culture varies the way its members solve problems of three major types 1. Relationship with people 2. Attitudes towards time 3. Attitudes towards the environment Trompenaar identifies five major cultural differences in how people handle relationships with other people

Trompenaars Cultural Dimensions


Universalism Versus Particularism
Universalism: ideas and practices and practices can be applied every where without modification Particularism: Circumstances dictate how ideas and practices should be applied. Universalism Emphasize and guided by strict rules and legal contracts United States, European Countries Particularism Focus more on personal relationship and trust rather than formal rules and contracts Republics of former soviet union, Asian countries Engage in small talk to get to know each other, flexible and not rules get in the way of what is right thing to do between friends

Lets get down to business attitude and not deviate from regulations

Trompenaars Cultural Dimensions


Individualism Versus Collectivism
Individualism Collectivism

People regarding themselves as individual

People regarding themselves as a part of group


Attributed greater personal responsibility for group failure than success and accepted greater personal responsibility than individualistic managers Collectivist managers who took part in individual oriented training programs had lower self-efficacy beliefs and displayed lower performance than their counterparts who took part in group oriented training

Attribution

Attributed greater personal responsibility for success and group responsibility for failure

Self efficacy Individualistic subjects had enhanced self efficacy and displayed greater effort and performance when their training was directed towards personal actions and potential

Trompenaars Cultural Dimensions


Attributes Individualism Collectivism

Stress

Bureaucratic /formal structure more stressful

High level of stress when faced with making decisions themselves

Goal Setting and Performance

Tendency towards commitment to individual goals

Tendency toward commitment to goals that serve the best interest of the group, participative goal setting yield better results Relationship and interpersonal criteria are more salient features

Trompenaars Cultural Dimensions


Neutral Versus Affective:
Neutral Culture: Emotions ate held in check and not outwardly expressed ( Japan and British)
Affective Culture: Emotions are openly and outwardly expressed ( Mexican, Dutch, Swiss). Tend to smile a great, talk loudly, greet other enthusiastically It should not be assumed that neutral culture are uninterested or unmotivated because of their non-expressive demeanor, and vice versa. In Communication and other interpersonal interactions, the nonverbal and verbal cues have to be read differently in both the culture types

Trompenaars Cultural Dimensions


Specific Versus Diffuse.
Specific Culture: Here individuals have a large public space where they readily let others enter and share a small private space which they guard closely and share only with close friends and associates ( United states, Austria, united Kingdom, Switzerland)

Diffuse Culture: In this both the public space and private space are similar in size, individuals guard their public space carefully because entry into public space afford entry into private space ( Venezuela, China and Spain) Individuals in specific cultures are open, extroverted, there is a strong separation of work and private life. Individuals in diffuse culture often appear indirect and introverted, work and private life are often closely linked In diffuse culture, outsiders should respect a persons title, age, and background connections and should not get impatient when people are indirect or evasive In Specific culture, outsiders should try to get to the point, minimize the titles, play down achievements or skills not relevant to the situation

Trompenaars Cultural Dimensions


Achievement Versus Ascription
Achievement culture is one in which people are accorded status based on how well they perform their functions ( Austria, USA, Switzerland, Sweden, Germany) Ascription culture is one in which status is accorded based on who or what a person is. ( Venezuela, China, Japan) Achievement cultures give high status to high achievers. Ascription culture accord status based on age, gender, or social connections

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