Impact of National Culture on Organisational Culture PDF

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Impact of National Culture on Organisational Culture

Since the 1980s, ‘culture’ has become a main concern for management. It started when Japanese companies outperformed American companies, and ‘Japanese culture’ or ‘Japanese management’ was invoked as the mysterious recipe for their success. In 1982, two books, each by a Harvard professor and a McKinsey consultant (Deal and Kennedy 1982; Peters and Waterman 1982) introduced the concept of ‘corporate culture’ to explain why some American companies did so much better than others. The 1980 first edition of my book Culture’s Consequences owed part of its success to being the first data-based research report in an otherwise fuzzy and mysterious area. The distinction between national and organizational cultures was not clear to many readers; some tried applying my cross-national dimensions to corporate cultures.

National Culture and Corporate Culture have become important topics in business. Whilst Corporate Culture is an intangible concept, National Culture may be both tangible and intangible. National Culture refers to the general attitudes, belief systems, values, and traditions, particular to a nation. On the other hand, corporate culture is the pattern of arrangement, material or behaviour which has been adopted by a society (corporation, group, or team) as the accepted way of solving problems. The way people do business, the way they do things and the things that are of value may vary across countries. As such, same organisations of different national origins may have to do things differently bearing in mind the culture of the nation or origin within which they operate. Adler and Jelinek (1986) suggested that "culture, whether organisational or national, is frequently defined as a set of taken-for granted assumptions, expectations or rules for being in the world," and that "the culture concept emphasises the shared cognitive approaches to reality that distinguish a given group from others." At worst, studying corporate culture outside the context of national culture leads to the same fault directed against the national culture school, namely the treatment of culture as a residual variable, precluding a valid argument of causality.

In an attempt to connect between the two levels, Laurent (1986) proposes that corporate culture can modify the first two levels in Schein's (1985) model, namely (a) behavior and artifacts and (b) beliefs and values, but is not capable of affecting the third, deeper level of underlying assumptions which is derived from one's national culture

Hofstede (1980) postulated that a national culture can be defined in five dimensions of (i) power distance, (ii) individualism, (iii) masculinity, (iv) uncertainty avoidance, and (v) long-term orientation.

Culture does not exist in a tangible sense, it is a product of our imagination and is only useful in so far as far as it helps us understand and predict phenomena in the real world. he concept of culture does not apply at the level of individuals. Individuals have personalities, only partly influenced by the culture in which they grew up. ‘Culture’ in this sense is “the collective programming of the mind that distinguishes the members of one group or category of people from others” (Hofstede, Hofstede and Minkov 2010, 6) In the case of national culture, the category is the nation. In the case of organizational cultures, the category is the organization as opposed to other organizations—other things, like nationality, being equal.

Culture as collective programming of the mind manifests itself in several ways. From the many terms used to describe manifestations of culture, the following four together cover the total concept rather neatly: symbols, heroes, rituals and values. 1. Symbols are words, gestures, pictures or objects which carry a

particular meaning, only recognized as such by those who share the culture. 2. Heroes are persons, alive or dead, real or imaginary, who

possess characteristics that are highly prized in a culture, and thus serve as models for behaviour 3. Rituals are collective activities, technically superfluous to reach

desired ends, but within a culture considered socially essential: they are therefore carried out for their own sake. 4. Symbols, heroes and rituals together can be labeled

‘practices’. Two large research projects into culture differences (Hofstede 1980; Hofstede et al. 1990) showed that national cultures differ mostly at the level of values, while organization cultures differ mostly at the level of the more superficial practices: symbols, heroes, and rituals. National cultures oppose

otherwise similar individuals, institutions and organizations across countries; the pioneer study on national cultures was based on different national subsidiaries of one large international business company. Organizational (also called corporate) cultures oppose different organizations within the same countries.

 Power distance correlates with: income inequality, respect for elders, polarization and violence in national politics.  Uncertainty avoidance correlates with: number of laws and rules, belief in experts, xenophobia, faster driving.  Individualism correlates with: national wealth, faster walking, weaker family ties, frequency of using the word “I.”  Masculinity correlates with: a stress on growth as opposed to care for the weak and the environment, and negatively with the percentage of women elected in parliaments and governments.  Long-Term Orientation correlates with: savings rates, economic growth of poor countries, and adapting to changed reality, as opposed to Short- Term Orientation which correlates with: concern for social obligations, national pride, and fundamentalisms.  Indulgence correlates with: higher birthrates, more active sports, more obesity, more private Internet, smaller police force.

National Culture

As per the Hofstede’s postulates, the national culture can be quantified over five major dimensions. Power distance relates to the degree to which the members accept basic power inequality and accept it as a norm. Collectivism vs. Individualism gauges the integration of members into societies. Masculinity vs. Femininity measures the division of social responsibilities and roles among the two genders. Uncertainty avoidance measures the level of uneasiness the society members face in the extent of an uncertain future. Orientation (Long Term vs. Short Term) measures the degree to which the society members emphasize on hold future planning and investing. Each mentioned dimension is thus scored on a scale of 0100 for comparison. Impact of National Cultures on Organisational Cultures To qualitatively analyze evaluate the impact of national cultures on organizational cultures, each of the dimension under Hofstede's five dimensions is as follows:

1.

Power Distance – Malaysia ranks low on the scale by Hofstedeindicating that they hold large distances between ranks in organizations while Israel, for example, rank on the opposite end of the, indicating that meaning that Israelis follow the egalitarian practice, an employee can approach its manager and vice versa. Thus an organisations which prefers great distribution of power usually face challenges while operating in countries and can be a reason for high conflict in day-to-day activities.

2.

Individualism – Countries like the United States Of America score high on this dimension of the scale since they emphasize on individual achievements which comes from a cultural upbringing that expects people to be independent early part of life. On the contrary, Guatemala is on the other end, meaning that they prefer working in groups and believe in performance as a cooperative achievement. Ignorance of this factor sometimes leads to office politics and can delay growth.

3.

4.

5.

Feminity and Masculinity- Japan rank the lowest on Hofstede's scale, indicating that their masculine orientation and have autocratic workplaces. On the other end, people from Sweden and Norway show more empathy towards their fellow female employees and are more likely to invest time on personal ties encouraging commitment with the help of a friendly work ecosystem. IT companies have tried to overcome this but still face some resistance from orthodox cultures. Uncertainty avoidance – Employers with a tendency to avoid uncertainty culture prefer routine work and try to avoid uncertainties while making decisions. They also like having set defined rules and guidelines and lay emphasis on human capital issues like training and empowerment. This poses as one of the biggest challenges especially for countries looking for additional offices other than Silicon Valley. Long-term orientation – Organisations are more likely to set a large number of long-term goals in order to earn profits and expand their customer base. A typical example could be the implementation of Quality Management, which usually faces resistance from countries which doesn’t embrace long term dedication and are often adopted when the employees realize the positive impact, which takes longer sometimes.

France Vs. Korea – Cultural Diversity Based on Hofstede's five dimensions discussed above, in this section, we are going to compare France ( Country of Origin for Capgemini) and Korea ( Country of Origin for Hyundai). With the scores, we will try to analyze and compare the difference in the cultures of the countries and try to extrapolate and verify if they are reflected in the respective organization’s culture also.

Power Distance, with a

score of 60, South Korea is a hierarchical society in which everybody has a defined place and doesn’t need any justification. Whereas it’s counterpart. France too lies in the same range with a score of 68. Children in France are raised to be emotionally dependent on their parents upto a certain degree. This dependency is transferred to teachers and hence superiors. It is a society where a fair degree of inequality is an acceptable norm. This power centralisation of power is not only limited to companies and government, but also geographically, evident by the fact that most highways in France lead to Paris. Direct impact of this national culture is that French companies usually have one or two hierarchical levels compared to its counterparts in Europe (especially Germany and UK). CEO’ are generally referred to as President Director General (PDG), which is considered as a prestigious abbreviation for the same. The PDGs are generally from prestigious universities often referred to as “grandes écoles”, big schools.

-South Korea, with a score of 18 stands clearly as a collectivistic society whereas France with a score of 71 stands as an individualist society. South Korea’s national culture is that of a long-term commitment to the member ‘group’, be it family (or extended joint family or relationships). Loyalty is paramount and hold the highest importance in rules and regulations in the society. Everybody takes responsibility for their fellow group members. Office relationships are mostly Individualism

perceived in terms of moral grounds (like a family) and corporate activities like hiring or promotions are decided upon factors like employee’s engagement and the management in the group. On the contrary, in France children are expected to be independent emotionally with respect to the groups they are part of. The responsibility of an individual is limited only to taking care of himself and one’s family. France has a unique combination of a high Power Distance score and Individualism. The very evident fact is that trade unions and employers don not engage in conversation as they believe that each other belongs to a separate species. This all results in making a strong distinction between private life and work life than in Korea. People in France however depend on the central government and consider it as an impersonal power centre that will not invade the private life easily.

Individualism – Both South

Korea and France score fairly the same on this dimension, with score of 39 and 43 respectively and both the nations are thus considered to have a Feminine society. In Feminine societies, the main focus is on “working in order to live”, and corporates try to achieve consensus. People in such countries give high importance to equality, solidarity and quality in their professional lives with most of the conflicts being settled by negotiation and compromise. People in both France and South Korea prefer work incentives such as flexibility and free time more than monetary ones. An effective manager in these countries is one that achieves supports involved decision making process and is supportive generally. France has a famous welfare system (securité sociale), the 35-hour working week, five weeks of holidays per year and gives prime importance to quality of life.

Uncertainty Avoidance- At

a whopping high score of 86, national culture in France clearly indicates that people here do not like surprises. They prefer a well-defined structure and plan. They prefer to know clearly about all the necessary facts before meetings and negotiations. A direct consequence of this results in people of France being excellent at developing complex technologies and systems. There is a strong requirement for legal regulations, but that doesn’t mean they will all of them. Coupled with a high score on Power Distance, power-holders don’t necessarily feel the need to obey all these rules and hence claim an exception.

On similar grounds, South Korea has a high score of 85 and is among the highestranked countries in this dimension. Like France, South Korea also maintains strict laws, rules, and codes and is particularly intolerant of unorthodox ideas and behavior. People have an inner urge to be punctual and are self-motivated to work hard. The downside is that innovation is sometimes opposed. Long Term Avoidance-

With a score of a perfect 100 on this dimension, South Korea the highest landing it among the most practical societies, which gives importance to long-term visions. The religious angle is missing among the Koreans, and practical virtues guide people. It has a direct impact on how the organizations function here. Their primary focus is not to earn quick money but to serve the various shareholders and the common public for many generations to come. They priorities steady growth over quarterly or yearly profits. France, on the other hand, scores a moderate 63 on this part of the model. People here believe that truth depends on the context and situation. They are adaptable to traditions and conditionals in general and have a mixed focus on both short term and long term benefits to the organization and the society....