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Chapter 13
Culture and Diversity
CHAPTER OVERVIEW
In today’s diverse and global organizational environment, the workplace is filled with a rich
diversity of cultures, languages, ideas, and knowledge. Great managers must understand how
culture and diversity impact organizational performance. Importantly, great managers do not
stereotype people based on surface diversity factors like age, ethnicity, and gender but rather take
into consideration how people differ in terms of deep diversity factors like values, attitudes, and
skills. This chapter presents frameworks for understanding national and organizational culture
and provides evidence-based recommendations for diverse teams and creating high-performance
organizations.
LEARNING OBJECTIVES
KNOWING OBJECTIVES
1. Articulate how organizational cultures differ.
2. Recognize the key factors involved in structuring an organization.
3. Describe the importance of inclusive cultures to managers and organizations.
4. Understand the select dimensions of people-first cultures that have been linked to high
performance.
DOING OBJECTIVES
1. Assess an organization’s culture in relation to your own personal fit.
2. Act in ways that facilitate rapid acclimation and socialization in a new context.
3. Improve the productivity of a diverse team.
4. Influence the cultural practices that are linked to healthy and high performance outcomes.
KEY STUDENT QUESTIONS
Students will approach this chapter asking these questions:
1. What is meant by “organizational culture” and how much does it really matter to
an organization?
2. What is the best way to handle diverse teams? Should I be “color–blind” to
differences between group members or should I explicitly recognize differences?
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In answering the first question, the instructor might wish to send students out on a field trip to do
cultural studies of different organizations that they can easily access (e.g., restaurants,
The key to answering the second question is addressing the paradox of wanting to treat people as
equals but also wanting to acknowledge and grow from diversity. To be “blind” to differences is
laudable in the sense that managers should not stereotype and discriminate against employees
different group members have to offer.
CHAPTER OUTLINE
I. Introduction
A. Organizational culture = a shared way of being, acting, and interpreting life in the
company
B. The things that make a place unique are not necessarily the things that make it
successful
C. Managers can build positive cultures within their own group and hope their success is
contagious
II. Understanding Culture and its Importance in Organizations
A. Culture refers to the values, norms, and assumptions that guide people’s behavior
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B. Schein’s work on culture describes culture as a pattern of basic assumptions which have
been…
1. Invented, discovered, or developed by a given group as it learns to cope with
problems
2. Working well enough to be considered valid
3. Taught to new members as the correct way to perceive, think, and feel about these
problems
C. Schein’s model includes:
1. Artifacts = organizational attributes that can be observed, felt, and heard
2. Values = espoused goals, ideals, norms, standards, moral principles
3. Underlying assumptions = phenomena that remain unexplained when insiders are
asked about the values of the organizational culture
a. Schein said the real essence of culture is at this level
b. Most people cannot see their own culture at this level, thus making it hard to
make successful organizational change
D. Ways that culture gets preserved
1. Rites
2. Ceremonies
3. Rituals
4. Storytelling (commonly about…)
a. Managers
b. Getting fired
E. Making a Cultural Choice: The Competing Values Model by Quinn
1. Categorizes cultures along two axes
a. Degree to which a company values stability and control versus flexibility and
discretion
b. Value placed on internal focus and integration versus external focus and
differentiation
2. Four different cultures are derived from the two axes
a. Clan
i. Values flexibility and has internal focus
ii. Tend to be friendly places to work with high degree of individual
development
iii. Leaders play role of mentor and coach
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b. Hierarchy
i. Values stability and has internal focus
ii. Leadership role consists of organizing, monitoring, measuring, and evaluating
activities of subordinates
iii. Financial and production functions tend to be relatively powerful
c. Market
i. Values stability with external focus
ii. Directed toward competing in their market segment
iii. Leadership tends to use strict measures of performance (e.g., quotas)
iv. Good for driven, competitive types of people
d. Adhocracy
i. Values flexibility and external focus
ii. Leadership plays entrepreneurial role
iii. Constant competition to be first to market
iv. Risk taking is valued
F. An Alternative View of Culture
1. Behaviorists see organizational culture as a manifestation of the company’s reward
system
2. Thus, change the reward system to change culture
G. Is One Type of Culture Best?
1. Research shows there is not one best culture: It depends on the structural
characteristics of the industry in which the company competes
a. Clan are better than clans when industry is stably and barriers to entry are high
b. Markets are better than clans when industry engages in dynamic competition and
barriers to entry are low
2. Almost no company is a “pure form” of any culture
4. Strong culture = there is very little variance in the way people think and behave
III. Organizational Structure: A Key Cultural Ingredient
A. Definitions:
1. Organizational structure = the work roles and authority relationships in an
organization
2. Span of control = the number of people that report directly to a single manager
3. Height of an organization = the number of hierarchical levels in an organization
a. Height and span of control are inversely related
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4. Departmentation = the grouping of resources into work units
a. Most common forms are by function, by geography, by customer, by product, and
hybrids of these four
B. Structure Influences Behavior
1. Common managerial trap it to fail to realize how structure influences behavior
2. Zimbardo’s Stanford Prison Experiment
behaviors of those roles
d. Experiment got out of hand and had to be terminated early
3. In creating a desired organizational culture, you must align the structure of work with
the missions, goals, and strategy you are trying to achieve
4. Decide what you are trying to achieve, and then create the structure that supports it
IV. People Make the Place: Person-Organization Fit
A. Person-Organization Fit (P-O Fit) = the extent to which a person’s values, personality,
and work needs align with the organizational culture
B. Attraction – Selection – Attrition Framework = suggests that individuals and
organizations are attracted to each other based on similar values and goals
1. People are attracted to organizations with similar values that they have
2. The organization selects people who are the most similar to the organization
3. People who do not fit with the organization are more likely to leave (attrition)
C. Relationships with strong P-O fit
1. Increased job satisfaction
2. Increased commitment
3. Longer tenure
4. More OCBs
5. There is no relationship with job performance
D. Cultural Adaptation: Socialization and Onboarding
1. Employee socialization = the process of helping employees quickly adjust to and
reinforce the central values of the organization
2. Role clarity = understanding the job requirements
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a. Research shows that new employees experience moderate levels of self-
confidence, role clarity, and perceptions of self acceptance in the first month of
employment
b. By months 3-6 role clarity and social acceptance perceptions decrease and self-
confidence increases and then decreases again
3. Critical content in socialization efforts
a. Organizational mission and values
b. Job requirements
c. Networks and politics
d. Language or jargon
e. Organizational history
V. National Cultural Differences
A. Most well-known research on cultural differences is by Hofstede at IBM
B. Five dimensions identified by Hofstede
1. Power Distance
a. The degree to which people accept differences in wealth, status, and well-being
2. Individualism vs Collectivism
a. Individualism: Values individual freedom, achievement, and competition
b. Collectivism: Values group harmony, cohesiveness, consensus, and cooperation
3. Achievement Orientation vs Nurturing Orientation
a. Achievement Oriented: Value assertiveness, performance, success, competition
b. Nurturing Oriented: Value quality of life, and warm personal relationships
4. Uncertainty Avoidance
a. The extent to which people tolerate uncertainty and risk
C. Diversity distance = the distance or extent of difference between cultures
VI. Inclusive Cultures
A. Characteristics of Inclusive Cultures
1. A formal corporate statement
a. Does not guarantee action, but a lack of a formal statement of inclusiveness is
conspicuous
2. Symbols, rituals, stories
a. Structures and practices should support diversity
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3. Provide opportunities for networks and support
a. Some of the most effective diversity trainings do not happen in formal classrooms
setting
5. Manager accountability
a. Tracking progress in recruiting, training, and developing minority members
6. Top management models and tone setting
B. The Payoffs from Inclusive Cultures
1. The law requires all people receive the same opportunities for employment though
laws do not require preferential treatment
2. There are moral implications for being inclusive, however there are also good
business reasons as well
a. Reduction in absenteeism and turnover
b. Marketing advantages
c. Company reputation
d. Recruiting advantages
VII. Working Productively with Diverse People and Teams
A. Challenges to working in diverse teams
1. Communication and reaching agreement is more time-consuming and difficult
2. May take longer to reach trust within group
B. Benefits to working in diverse teams
1. Have the potential to achieve better outcomes
2. Consider more ideas
3. Avoid groupthink
4. More creative potential
C. Building awareness
1. Three common traps with respect to teams and diversity awareness
a. Tendency to romanticize diversity
i. Deeming any differences important
ii. Thinking diversity magically improves outcomes
b. Denying or ignoring important differences
c. Focusing on “surface–level diversity” and ignoring “deep–level diversity”
2. Surface-level diversity = differences that are easily seen
a. Gender
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b. Age
c. Race
d. Ethnicity
3. Deep-level diversity = differences among people in such areas as attitudes, beliefs,
knowledge, skills, and value
4. The biggest danger is assuming that surface diversity is indicative of deep-level
diversity
D. Understanding Differences
1. The most prevalent myth about diversity is that people are more different than alike
a. Few research-documented differences relevant to team performance.
b. Three dimensions where research has found difference are age, ethnic heritage
(culture) and gender
i. Research by Claire Raines has identified four generations of workers with
unique history and set of common life experiences.
a.) Traditionalist.
b.) Boomers
i.) Born between mid l940s and early l960s
ii.) Values focus on quality of life and nonconformance
iii.) Seek recognitions and place value on respect
c.) Generation X
d.) Millenials
i.) Born in early l980s through the turn of the century
ii.) Surrounded by technology and media-driven world
iii.) Like Xers, believe workplace is place to express oneself and often
socialize
iv.) More value on global awareness, heroism and goal-achievement
ii. Gender communication differences
a.) Men in group settings
i.) Tendency for conversation for solving problems, maintaining status
and preserving independence
ii.) Activities and doing things together is central
b.) Women in group settings
i.) Tendency to use conversation to negotiate closeness and intimacy
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ii.) Building community is sitting and talking
E. Taking Action
1. Heighten attention to good management fundamentals.
a. Focus on job related behaviors, earn trust and respect by treating others with
respect and dignity
b. People of diverse backgrounds rarely need preferential treatment, just fairness
c. Rules of good management do not change with diverse people
2. Actively challenge your assumptions
men and women
c. Perceptions of difference can influence important decisions
3. Increase interaction and inclusion
a. Reduces influence of stereotypes and improves team functioning
b. Be diligent about including diverse others in key meetings and interaction
c. Get to know team members and recognize and surface important differences
d. Seek two-way understanding by sharing and listening
VIII. Building “People First” High-Performance Cultures
A. How cultures and subcultures are created
1. Gallup research showed more variation in engaged groups within companies than
between companies
2. Thus, high-performance cultures are more typical of subcultures within units rather
than the whole organization
B. The characteristics of high-performance cultures
1. High-performance work practices include, but are not limited to incentives, selectivity
in hiring, succession planning, extensive training, and decentralized decision making
2. Work by…
a. Providing knowledge and skills to employees
b. Heighten motivation
c. Improve social dynamics
3. Meta-analysis shows that utilizing these high-performance work practices is
associated with organizational performance
C. Selective hiring of new personnel
1. Good people hire other good people
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2. Continually adjust the hiring process to make sure people hired are successful
D. Decentralized decision making and employee involvement
1. If the people hired are good, great organizations then let those people go to work
2. Encourage employees to go beyond the literal boundaries of their jobs
population
E. Comparatively high compensation contingent upon performance
1. High wages can be a win-win (attract better employees and encourage better
performance)
2. Reward what really matters
F. Extensive training
G. Employment security
1. Good employees work better when they feel secure and do not have to worry about
layoffs
2. Trend towards temps, contract and part-time employees could hurt security
H. Reduced status distinctions and barriers
1. Most people dislike status distinctions
2. Ways status is communicated
a. Dress
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I. Extensive sharing of information through the organization
1. Trust is built by treating people as if they can be trusted
2. Sharing information demonstrates trust and willingness to share power
J. Corporate examples of high-performance cultures
1. Whole Foods
b. Information sharing
2. The Men’s Wearhouse
3. AES Corp
a. Decentralization
b. Information sharing
IX. Cultural Audits
A. A cultural audit is an evaluation of a company’s values and practices to ensure they are
aligned with corporate strategy
B. Serves as a starting point to address cultural strengths and weaknesses in order to
facilitate change
C. Example Areas to Assess
1. Pay and benefits
D. Examples of areas of change post audit
1. Hiring
a. Finding people who fit values of the organization
2. Onboarding
a. Provide newcomers with information about culture
3. Team Interventions
a. Help guide which interventions will be useful
4. Leadership Development
a. Ensure linkage between leader’s behaviors and company values
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CASES
Zappos and their “Quit Offer”
1. The underlying logic of the “quit offer” is that people who take the money would not be a
2. Zappos must be very confident that their jobs and organization are good enough to make
3. Hsieh recognizes that employees are the “face” of the organization because they are the ones
4. The quit offer is consistent with at least two important high-performance work practices. First,
the practice is consistent with selective hiring. The quit offer can actually be seen as an extension
Socializing Expatriates Worldwide at PepsiCo
1. Factors that are important for expatriate assignments include knowing the language and being
able to become integrated into the new culture. Unlike getting a new “regular” job in your home
2. PepsiCo might wish to provide additional general cultural trainings prior to the expatriate
family can travel back to the home country to
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
visit friends and family. Such visitations might help alleviate stress from being so far away from
loved ones.
3. Answers will vary. Students might mention differences in language, food, climate, style of
“MANAGE WHAT” SCENARIOS
1. Will I Fit in Here? Decoding an Organization’s Culture
Debrief is found at the end of the chapter.
2. Avoiding Culture Shock
Debrief is found at the end of the chapter.
3. Making a Culturally Diverse Team Productive
Debrief is found at the end of the chapter.
4. Building Your Own High-Performance Subculture
Assuming that you have discretion in running your branch (aside from brand and marketing
expenditures) there are many things you could do to build a high-performance work culture
within your branch. First, you will want to define your core values and the culture that you
would like to promote. Then, you will want to consider structural elements that support that
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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
allowing your employees to understand the bigger picture behind the organization’s strategy and
processes. For example, you might share your financial reports with employees so that they
understand and can contribute to decisions that will impact the financial success of the branch.
MANAGEMENT LIVE
13. 1 Power Distance and Plane Crashes?
Class Discussion Questions:
1. How can we be sure that the plane crashes described were actually due to high power-
distance rather than some other factor?
2. If high power-distance can contribute to plane crashes, what other types of jobs might
experience serious problems and errors because of high power-distance?
3. What might be some disadvantages or potential workplace problems associated with low
power-distance like in the United States?
4. How could you train workers to go against something that is culturally ingrained in them?
13.2 Testing Hofstede’s Findings in Your Own World
A good companion resource to this Management Live exercise is a short free video depicting
children in China learning to speak English (link to the video is below). The instructor can show
this video in class and ask students to discuss how they might rate China in terms of Hofstede’s
cultural dimensions based on what they saw. Then the instructor can ask students to search for
Hofstede’s website online to find out how China actually scores on the different dimensions.
Link to video: http://www.ted.com/talks/jay_walker_on_the_world_s_english_mania.html
13.3 Diversity Flashpoints and Signals of Exclusiveness
Instructions:
Students will keep a log of diversity flashpoints that they observe in their classes and on campus
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13.4 The Diversity Philosophy at Booz Allen Hamilton
Class Discussion Questions:
1. Do anti-discrimination laws like the Civil Rights Act of 1964 address surface diversity or
deep diversity or both? Explain.
2. How can companies achieve the benefits of deep-level diversity and also achieve good P-
O fit?
3. Discuss the benefits and the challenges of having a team with lots of deep-level diversity.
13.5 Twelve Questions that Matter to Culture
Instructions:
Students should interview two friends and family members who work for two different
organizations. Students will ask their friends/family to answer the questions from Management
Live 13.5 (e.g., “Do I know what is expected of me at work?”). After conducting the two
different interviews, students should write a short report comparing the two organizations.
13.6 The Unique High-Performance Cultures of “Small Giants”
The instructor might wish to bring in a local small business owner to do a guest lecture related to
this Management Live. Students should be prepared with questions about the company’s culture
and should compare what they hear with what they learned in the textbook.
TOOL KIT
13.1 Improve Your Storytelling
Instructions:
Students will locate a story related to a management principle or idea that they find important.
The story could be from a newspaper, a book, a movie, or a friend or family member. Students
will then practice telling the story in front of small groups within class. Students will give
feedback to other group members about the story chosen and the way the story was told (e.g.,
Did they understand the point of the story? Would there be a more effective way to tell the
story?)
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13.2 Selecting Appropriate Organizational Forms
Instructions:
Have students assemble into groups of 3 or 4. Students will be asked to come up with a fictitious
behind their decision.
13.3 Determining P-O Fit by Decoding Cultural Characteristics
Instructions:
Students should interview two different friends and family members who work for two different
organizations. Students will ask their friends/family to describe their organization in reference to
the characteristics outlined in Tool Kit 13.3 (e.g., innovation and risk-taking, attention to detail).
After conducting the two different interviews, students should write a short report comparing the
two organizations and indicating which organization they think would be a better fit for them
personally.
13.4 Getting Underneath Surface Diversity
A companion resource to this Tool Kit is a widely reported study by Professors Marianne
resumes from fictitious applicants. The resumes were equal with regard to qualifications but
differed in terms of the name of the applicant. The names chosen were common names for either
black or white men or women (e.g., Kristen, Tamika, Brad, and Tyrone).
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After submitting almost 5,000 resumes, the researchers tracked how many times each fictitious
Discussion Questions:
1. Are you surprised by the findings? Explain why or why not.
2. What assumptions do you think the employers were making about the applicants based
on their names?
3. Do names reflect surface or deep diversity?
13.5 Six Principles for Managing Millennials
Because many of the students in the course probably are millenials, the instructor might survey