Chapter 06 – Organizational Cultures and Diversity
Chapter 6: Organizational Cultures and Diversity
Learning Objectives and Chapter Summary
1. DEFINE exactly what is meant by organizational culture, and discuss the
interaction of national and MNC cultures.
Organizational culture is a pattern of basic assumptions that a group learned as it
solved its problems of external adaptation and internal integration, and that has
worked well enough to be considered valid and, therefore, to be taught to new
members as the correct way to perceive, think, and feel in relation to those
2. IDENTIFY the four most common categories of organizational culture that have
been found through research, and discuss the characteristics of each.
Organizational cultures are shaped by a number of factors. These include the
general relationship between employees and their organization, the hierarchic
system of authority that defines the roles of managers and subordinates, and the
general views that employees hold about the organization’s purpose, destiny, goals,
incubator.
Family culture is characterized by a strong emphasis on hierarchy and orientation to
the person. Eiffel Tower culture is characterized by a strong emphasis on hierarchy
and orientation to the task. Guided missile culture is characterized by a strong
emphasis on equality in the workplace and orientation to the task. Incubator culture
is characterized by a strong emphasis on equality and personal orientation.
3. PROVIDE an overview of the nature and degree of multiculturalism and diversity
in today’s MNCs.
Success in the international arena often is heavily determined by a company’s
ability to manage multiculturalism and diversity. Firms progress through four
There are a number of ways to examine multiculturalism and diversity. One is by
looking at the domestic multicultural and diverse workforce that operates in the
MNC’s home country. Another is by examining the variety of diverse groups that
exist in MNCs, including homogeneous groups, token groups, bicultural groups,
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and multicultural groups. Several potential problems as well as advantages are
associated with multicultural, diverse teams. Diverse teams are not only helpful to
internal operations but can enhance sales to customers as well.
4. DISCUSS common guidelines and principles that are used in building multicultural
effectiveness at the team and the organizational levels.
A number of guidelines have proved to be particularly effective in managing
culturally diverse groups. These include careful selection of the members;
recognition of differences and preparation for dealing with them; identification of
the group’s purpose, tasks, and goals; establishment of equal power; mutual respect
The World of International Management: Managing Culture and
Diversity in Teams
1. Summary:
This vignette discusses how multicultural, multinational virtual teams can provide
companies with a competitive advantage over other firms. It is important, however,
to recognize that while such teams provide many benefits to companies, including
fewer problems with personality conflicts and stereotypes as well as the ability to
work virtually around the clock, they also present a number of challenges for firms.
Difficulties with communications and problems with establishing trust between
members are particularly common in virtual teams.
2. Definitions:
Outcome control—measure and regulate outcomes sought
Behavior control—specify the procedures to be followed by employees
Clan control—implement a set of values with reward or punishment that
individual achievement, personal responsibility
high collectivistic culture—culture with strong interpersonal ties,
collective achievement and responsibility
3. Good communication in a global team:
Initial meeting for introductions and individual job descriptions
Regular meetings, and follow-up conference calls with written minutes
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4. Trust for virtual teams:
Avoid “long lags in responding, unilateral priority shifts, and failure to follow
up on commitments.”
Early feedback and sufficient time for responses across time zones
Team building activities
Team determination of objectives, roles, etc.
5. Advantages of global virtual teams:
Reduces problems such as stereotyping, personality conflicts, power politics,
and cliques
Work doesn’t stop, just shifts to a different time zone.
Cohesive team can quickly solve complex problems and make effective
decisions.
6. Suggested Class Discussion:
1. Students should be able to explain why it is so important for international
managers to be sensitive to different national and organizational cultures, and
how cultural differences can influence how managers approach their
responsibilities, as well as their management style.
2. Students should be able to explain the advantages of multicultural teams in an
organization, and how they can give firms a competitive advantage.
7. Related Internet Sites:
BusinessWeek: {http://www.businessweek.com/}.
Real Change Network: {http://www.realchange.com/us/}.
Chapter Outline with Lecture Notes and Teaching Tips
The Nature of Organizational Culture
1) The chapters in Part One provided the background on the external environment, and the
chapters so far in this part have been concerned with the external culture. Regardless of
whether this environment or cultural context affects the MNC, when individuals join an
MNC, they not only bring their national culture, which greatly affects their learned
beliefs, attitudes, values, and behavior, with them, but at the same time, they enter into an
organizational culture.
Definitions and Characteristics
1) Organizational culture―the shared values and beliefs that enable members to understand
their roles and the norms of the organizations. It is a pattern of shared basic assumptions
that are developed by a group learned as it solves problems of external adaptation and
internal integration and that are taught to new members as the correct way to perceive,
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think, and feel in relation to these problems. Characteristics associated with an
organization’s culture:
a) Observed behavioral regularities: common language, terminology, and rituals
b) Norms: amount of work to be done and the degree of cooperation between
customer relations, and intergroup cooperation
f) Organizational climate/atmosphere: the way that participants interact with each other,
conduct themselves with customers, and feel about the way they are treated by higher-
level management
2) Problem: Sometimes an MNC’s organizational culture in one country’s facility differs
sharply from organizational cultures in other countries.
3) Some companies have deliberately maintained two different business cultures because
they do not want one culture influencing the other.
Interaction between National and Organizational Culture
1) There is a widely held belief that organizational culture tends to moderate or erase the
impact of national culture. The logic of such conventional wisdom is that if a U.S. MNC
2) Hofstede’s research found that the national cultural values of employees have a significant
impact on their organizational performance, and that the cultural values employees bring
to the workplace with them are not easily changed by the organization.
a) In examining and addressing the differences between organizational cultures, Hofstede
has provided the early database of a set of proprietary cultural-analysis techniques and
programs known as DOCDA (Diagnosing Organizational Culture for Strategic
Application). This approach identifies the dimensions of organizational culture
summarized in Table 6–1 in the text.
b) Even though an alliance may exist, the partners will bring different organizational
cultures with them. See an example in Table 6–2.
c) It can be difficult for an MNC with a strong organizational culture to break into
foreign markets where it is not completely familiar with divergent national cultures.
Organizational Cultures in MNCs
1) Given that many recent international expansions are a result of mergers or acquisition, the
integration of these organizational cultures is a critical concern in international
management.
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a) Numeroff and Abrahams suggested that there are four steps that are critical in
integrating the cultures of two previously separate organizations.
i) The two groups have to establish the purpose, goal, and focus of their merger.
iv) They have to identify the expectations of all involved parties and facilitate
communication between both departments and individuals in the structure.
b) With the proper management framework and execution, successful integration of
cultures is the preferable paradigm in which to operate. Sponsors and managers must
keep sight of the necessity to create, maintain, and support the notion of a united front.
2) There are three aspects of organizational functioning that seem to be especially important
in determining MNC organizational culture:
(1) the general relationship between the employees and their organization
(2) the hierarchical system of authority that defines the roles of managers and
their place in them.
3) Two continua: distinguish between equity and hierarchy, examine orientation to the
person and the task. See Figure 6–2: four different types of organizational cultures:
a) Family Culture is a culture that is characterized by a strong emphasis on hierarchy
and orientation to the person.
b) Eiffel Tower Culture is a culture that is characterized by strong emphasis on
and orientation to the person.
4) The four organizational cultures described by Trompennar are “pure” types and seldom
exist in practice. Rather the types are mixed and, as shown in Table 6–3 in the textbook,
overlaid with one of the four major types of culture dominating the corporate world.
Teaching Tip: Trompenaars’ book, Riding the Waves of Culture, which introduces the
organizational cultures described above, is extensively reviewed at
{http://www.amazon.com}.
Managing Multiculturalism and Diversity
1) Companies today frequently have to manage both multiculturalism and diversity:
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Phases of Multicultural Development
1) The effect of multiculturalism and diversity will vary depending on the stage of the firm in
its international evolution.
2) Table 6–4 in the textbook depicts the characteristics of the major phase in the evolution
(which are Phase 1: Domestic Corporations, Phase 2: International Corporations, Phase 3:
Multinational Corporations, and Phase 4: Global Corporations.)
3) Figure 6–4 explores the locations of international cross-cultural interaction, where local vs
expatriate management operates.
a) Domestic corporations (Phase 1): all domestic
b) International corporations (Phase 2): Diversity affects external relationships.
c) Multinational corporations (Phase 3): Diversity affects management within.
d) Global corporations (Phase 4): The diversity focus is internal and external.
Types of Multiculturalism
1) Domestic multiculturalism: it is not necessary for today’s organizations to do business in
another country to encounter people with diverse cultural backgrounds. Culturally distinct
populations can be found within organizations almost everywhere in the world. Domestic
multiculturalism can exist within the same ethnic groups. Generational differences can
slow organizational processes as one generation considers the other to be ineffective in its
methods.
2) Group multiculturalism: There are a number of ways that diverse groups can be
categorized. Four of the most common include:
a) Homogenous group―a group in which members have similar backgrounds and
generally perceive, interact, and evaluate events in a similar way.
b) Token group―a group in which all members but one have the same background,
Uruguayan, and three Chinese managers who are looking into mining operations
in Chile.
Potential Problems Associated with Diversity
1) Diversity may cause a lack of cohesion that results in the unit’s inability to take concerted
action, be productive, and create a work environment that is conducive to both efficiency
and effectiveness.
a) Unfortunately, when culturally diverse groups come together, they often bring
preconceived stereotypes with them.
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b) Inaccurate biases, inaccurate communication, miscommunication, misinterpretations,
the different perceptions of time.
Advantages of Diversity
1) There is growing evidence that culturally diverse groups can enhance creativity, lead to
better decisions, and result in more effective and productive performance.
2) Because group members come from a host of different cultures, they often are able to
create a greater number of unique (and thus creative) solutions and recommendations.
3) Culturally diverse groups can prevent groupthink.
a) Groupthink―consensus reached because of social conformity and pressures on
individual members of a group to conform to group norms.
Building Multicultural Team Effectiveness
1) Multiculturally diverse teams have a great deal of potential to be either very effective or
very ineffective.
a) Understanding the Conditions for Effectiveness: Multicultural teams are most
effective when they face tasks requiring innovativeness. They are far less effective
when they are assigned to routine tasks.
b) Using the Proper Guidelines: A number of useful guidelines are provided on page
xxx in the textbook.
Teaching Tip: The Keizai Society: U.S.–Japanese Business Forum is a society that has
been developed to promote understanding between Japanese and U.S. businesses.
The society’s website is available at {http://www.keizai.org/}. The goals of the society are
as follows:
To provide programs on a monthly basis that showcase specialists with expertise on
issues critical for the success of companies based in either the U.S. or Japan and
promoting entrepreneurs.
To provide an informal, informative environment built on respect that allows for
mutually beneficial communication and networking.
To provide two business networking-only events reflecting our bi-cultural
interests―Shinnenkai at New Year and a barbecue picnic in July.
The society meets once a week to listen to speakers and engage in other professional
activities. Consider showing the society’s website to your students to demonstrate one
example of an effort that is being made to bring culturally diverse businesses people
closer to one another.
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Chapter 06 – Organizational Cultures and Diversity
The World of International Management―Revisited
Questions & Suggested Answers
1. What steps should organizations take to get the most out of their virtual teams?
Answer: Good communication and trust among team members are essential to the
success of global virtual teams. Teams should establish regular meetings to ensure
everyone is on the same page and use the most effective technology available for a
task. In addition, companies can promote trust by encouraging team members to
teams that span time zones also offer the potential to work on a project nearly
continuously.
2. What types or organizational culture (family, Eiffel tower, guided missile,
incubator) would be best for leveraging global teams?
Answer: Many students will probably argue that the guided missile approach is the
best approach for leveraging global teams. Under this approach, all team members
3. What advantages and problems associated with diversity have been experienced by
global teams? How might they be overcome?
Answer: Diversity in a team promotes different perspectives. On one hand, these
differences can create problems, as team members view things such as worker
responsibility, strategy, and individual performance differently. Trust and
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