What Do Managers Need to Know about Managing in a Global Organization?
3-2 Describe what managers need to know about managing in a global organization.
A global world brings new challenges for managers, especially in managing in a country with a different national culture.10 A specific challenge comes from the need to recognize the differences that might exist and then find ways to make interactions effective.
U.S. managers once held (and some still hold) a rather parochial view of the world of business. Parochialism is a narrow focus in which managers see things only through their own eyes and from their own perspectives; they don’t recognize that people from other countries have different ways of doing things or that they live differently from Americans. This view can’t succeed in a global village—nor is it the dominant view held today. Changing such perceptions requires understanding that countries have different cultures and environments.
All countries have different values, morals, customs, political and economic systems, and laws, all of which can affect how a business is managed. For instance, in the United States, laws guard against employers taking action against employees solely on the basis of their age. Similar laws can’t be found in all other countries. Thus, managers must be aware of a country’s laws when doing business there. Also, managers need to be aware of current political views on issues such as immigration, free trade, and nationalism as they navigate the global environment. Why? Because these could affect an organization’s business processes, people, and workplace environment.
The most important and challenging differences for managers to understand, however, are those related to a country’s social context or culture. For example, status is perceived differently in different countries. In France, status is often the result of factors important to the organization, such as seniority, education, and the like. In the United States, status is more a function of what individuals have accomplished personally. Managers need to understand societal issues (such as status) that might affect business operations in another country and recognize that organizational success can come from a variety of managerial practices. Fortunately, managers have help in this regard by turning to the research that is being done on the differences in cultural environments.
Hofstede’s Framework
Geert Hofstede’s framework is one of the most widely referenced approaches for analyzing cultural variations. His work has had a major impact on what we know about cultural differences among countries and is highlighted in our “Classic Concepts in Today’s Workplace” box.
Globe Findings
Although Hofstede’s work has provided the basic framework for differentiating among national cultures, most of the data are over 30 years old. Another more recent research program, called Global Leadership and Organizational Behavior Effectiveness (GLOBE), is an ongoing cross-cultural investigation of leadership and national culture. Using data from more than 17,000 managers in 62 societies around the world, the GLOBE research team (led by Robert House) has identified nine dimensions on which national cultures differ.12 For each of these dimensions, we have indicated which countries rated high, which rated moderate, and which rated low.
Assertiveness. The extent to which a society encourages people to be tough, confrontational, assertive, and competitive versus modest and tender. (High: Spain, United States, and Greece. Moderate: Egypt, Ireland, and Philippines. Low: Sweden, New Zealand, and Switzerland.)
Future orientation. The extent to which a society encourages and rewards future-oriented behavior such as planning, investing in the future, and delaying gratification. (High: Denmark, Canada, and Netherlands. Moderate: Slovenia, Egypt, and Ireland. Low: Russia, Argentina, and Poland.)
Gender differentiation. The extent to which a society maximizes gender role differences. (High: South Korea, Egypt, and Morocco. Moderate: Italy, Brazil, and Argentina. Low: Sweden, Denmark, and Slovenia.)
Uncertainty avoidance. As defined in Hofstede’s landmark research, the GLOBE team defined this term as a society’s reliance on social norms and procedures to alleviate the unpredictability of future events. (High: Austria, Denmark, and Germany. Moderate: Israel, United States, and Mexico. Low: Russia, Hungary, and Bolivia.)
Power distance. As in the original research, the GLOBE team defined this as the degree to which members of a society expect power to be unequally shared. (High: Russia, Spain, and Thailand. Moderate: England, France, and Brazil. Low: Denmark, Netherlands, and South Africa.)
Individualism/collectivism. Again, this term was defined similarly to the original research as the degree to which individuals are encouraged by societal institutions to be integrated into groups within organizations and society. A low score is synonymous with collectivism. (High: Greece, Hungary, and Germany. Moderate: Hong Kong, United States, and Egypt. Low: Denmark, Singapore, and Japan.)
In-group collectivism. In contrast to focusing on societal institutions, this dimension encompasses the extent to which members of a society take pride in membership in small groups such as their family and circle of close friends and the organizations in which they are employed. (High: Egypt, China, and Morocco. Moderate: Japan, Israel, and Qatar. Low: Denmark, Sweden, and New Zealand.)
Performance orientation. This dimension refers to the degree to which a society encourages and rewards group members for performance improvement and excellence. (High: United States, Taiwan, and New Zealand. Moderate: Sweden, Israel, and Spain. Low: Russia, Argentina, and Greece.)
Humane orientation. This cultural aspect is the degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others. (High: Indonesia, Egypt, and Malaysia. Moderate: Hong Kong, Sweden, and Taiwan. Low: Germany, Spain, and France.)
The GLOBE studies confirm the validity of Hofstede’s dimensions and extend his research rather than replace it. GLOBE’s added dimensions provide an expanded and updated measure of countries’ cultural differences. It’s likely that cross-cultural studies of human behavior and organizational practices will increasingly use the GLOBE dimensions to assess differences between countries.