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 today’s MNCs.
4. DISCUSS common guidelines and principles used
in building team and organizational multicultural
effectiveness.
6-1
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
6-2
The Nature of
Organizational Culture
❖Other values and beliefs
➢ Philosophy set forth regarding how to treat
employees and customers
➢ Rules dictating do’s and don’ts 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
6-3
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
❖ Even in the presence of multinational alliances,
partners will bring different organizational cultures with
them
❖ Difficult for an MNC with a strong organizational
culture to break into foreign markets
➢ Unfamiliarity with divergent national cultures
6-4
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
6-5
Organizational Cultures
6-6
Organizational Cultures in MNCs
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
they’re 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
❖ Characterized by traditions and customs
❖ Foreign to most managers in the US
6-7
Organizational Cultures in MNCs
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
❖ Each role described, rated, and has salary
range
❖ Jobs are awarded based best fit
6-8
Organizational Cultures in MNCs
Eiffel Tower Culture (continued)
➢ Learning involves the accumulation of skills
necessary to fit a role, and organizations:
▪ Use qualifications in deciding how to schedule,
deploy, and reshuffle personnel to meet needs
▪ Employ assessment centers, appraisal systems,
training and development programs, and job
rotation to manage personnel
➢ Ill-equipped to handle things when changes
need to be made
6-9
Organizational Cultures in MNCs
Guided Missile Culture
❖ Strong emphasis on equality in workplace
and in task
➢ Work-oriented culture where the work is
undertaken by teams or project groups
❖Egalitarian and task-driven
❖Changes can happen quickly
➢ Loyalty to profession and project are often greater
than loyalty to the organization itself
❖ Motivation tends to be more intrinsic
6-10
Organizational Cultures in MNCs
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
❖ Environment where participants thrive on an intense,
emotional commitment to the nature of the work
❖ Employees often overworked but happy
6-11
Organizational Cultures in MNCs
Incubator Culture continued
❖Changes are fast and spontaneous
❖Motivation remains highly intrinsic and intense
❖Leadership is achieved and not gained by
position
6-12
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
6-13
Types of Multiculturalism
❖Domestic Multiculturalism
➢ Multicultural and diverse workforce operating in
MNC home country
❖Group Multiculturalism
➢ Homogenous groups
➢ Token groups
➢ Bicultural groups
➢ Multicultural groups
6-14
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
❖ Miscommunication
❖ Misinterpretations
❖ Different perceptions of time
❖ Attitudinal problems
➢ May cause lack of cohesion resulting in unit’s inability to take
concerted action or be productive
6-15
Advantages of Diversity
❖Enhances creativity
❖Leads to better decisions
❖Generates more effective/productive results
❖Leads to more unique and creative solutions
and recommendations
❖Prevents groupthink
❖Can facilitate highly effective teams under right
conditions
❖Enhances relationships with customers
6-16
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
6-17