A large number of academic scholars have the same opinion that the field of management must be looked at in a broader perspective. This is due to nothing else but the environmental influence on management practices. The cross-cultural study of management entails the study of management cultural variables – which have the propensity to have influence on management practices in multiple as well as dissimilar cultures. Managing along with organizing are culturally dependent on each other due to the fact that they actually involve the making or moving of tangible objectives. They rather consist of manipulating symbols which have significance to the very people who are managed (Clark, 1998).
Various studies in the field of corporate culture suggest that the success of a number of organizations is associated with having a powerful culture inside the organization. Such a culture provides a foundation for the policies and practices of that particular organization.
William Ouchi identifies the following as the features of Z type (a hybrid between American and Japanese type of organizations) of organizations:
A place for criticism and honesty
Trust, friendship and working together
Management by walking around
Valuing people as resources (Ouchi, 1982).
McKinsey presented a framework based on the idea that any management strategy, in order to be successfully implemented, must fit the culture of the organization. The seven variables listed in the framework are:
Skills (Waterman, 1982).”
The 7-s framework identifies corporate culture to be a function of Seven Variables. In case the strategy of an organization fails or inevitably runs into some problem, it is for the reason that the strategy doesn’t fit one or more of the Seven Variables. All the above-mentioned variables are interrelated to each other. While the staff variable refers to the people working in the organization, skills refer to their respective capabilities. The style variable is the manner in which the management acts and behaves. Shared values are the beliefs commonly shared by many people in the organization. While the structure provides authority-responsibility relationship, systems indicate the processes, procedures, and courses required to complete specific tasks. The strategy is associated with the means to form the corporate culture. A superior understanding of the technicalities as well as dynamics of an organization can be achieved through the culture that prevails in an organization.
The term culture has been borrowed from anthropology where there is no consensus on its meaning. Just as societies have their own culture, corporations as entities also have their own culture. Culture is the collection of common views, expectations and beliefs of the members of the organizations. The values, beliefs and norms usually involve the following aspects:
The basic goals of organization
The preferred means by which those goals should be attained
The role responsibilities assigned to each member in the organization
The behavior patterns required to perform roles
A set of rules or principles which relates to the preserving of organizational identity as well as integrity
These values and norms which constitute corporate culture are not in writing but are understood by all the members of the organization. Even the newcomers to the organization get to know them either through formal training programs and orientations or from their peers. When members of an organization share the same values, they will become more cohesive and committed to their goals. Such commitment is essential for better performance and productivity improvement. Although it is not visible, corporate culture still exists and influences people and activities in organizations.
Deal and Kennedy, in addition to values and norms, include heroes, rites and rituals as part of corporate culture (Deal and Kennedy, 1982). The rites, rituals and heroes are some ways of reinforcing desired behaviors and expectations among the members of an organization. Donnelly goes one step further by including ethics, life styles and to a great extent the personality of the chief executive as the elements which foster corporate culture (Donnelly, 1984).
The Corporate culture can be summed up as a way of doing things in an organization, which is developed and fostered over a period of time through various socialization processes, some of which are formal processes while others are informal.
Changing Corporate Culture
Even in the most stable environments, change is a constant, no matter how slight. Change is any alteration of the organization’s current situation. Creativity, the process by which novel ideas are generated or innovation, the transformation of creative ideas are all different forms of change. In this report, we will discuss change from the perspective of corporate culture
One of the major questions raised in the area of corporate culture is: Is it possible to change corporate culture in an organization? People have conflicting views about it. Some contend that the culture in an organization is strongly imbedded and therefore it may be impossible to change. At the most, only a few modifications can be made as long as they don’t affect the core of the existing culture. They may illustrate their point by citing some cases where the new Chief Executive failed to change the culture when he and his teammates took over the corporation and wanted to revamp it.
On the other hand, there are those who believe that culture within a corporation can be changed. The organizations, which made a turnaround in their business, are cited as examples. For instance, an American electronics company was loosing money. The Japanese took over, introduced new values and new ways of doing things and the company made a turnaround in three years. According to Schwartz and Davis (1981) the successful implementation of major strategic shifts in any company depends to a great extent on how the organization combines its culture with changes in organizational structure, its systems and people to produce desired behavior.
Changing corporate culture is a serious issue. A great deal of care and a well thought out plan must be utilized in this process. Ill founded assumptions, carelessness, and taking things for granted in changing corporate culture may have disastrous consequences on the organization, ranging from subtle protests to open revolt. Through such cultural changes, organizations lose their best people to competitors, productivity declines, and a poor image will be created for the organization. Thus, the whole survival of the organization may be threatened by rushing to change corporate culture.
Short and Ferratt (1984) suggest that in changing corporate culture, the focus should be on work units. Instead of trying to change values and beliefs first with the assumptions that work unit behaviors would follow, work unit, culture must be changed first. The behaviors, which establish and maintain the culture of work units, are: job enrichment, employee involvement, targeting behavior, reinforcing behavior, attending to production and attending to interpersonal relations.
Managing Corporate Culture is not simple. It requires constant assessments and monitoring by examining the external and internal environment. Such examination would reveal the nature of changes that are anticipated or are taking place in these environments. These changes may force the organization to adapt or modify their corporate culture according to the demands of the environment. A relaxed attitude on the part of the managers who believe they have a strong culture built over the years to enable them to cope with any kind of situation is risky. Uttal asserts that a static culture means a continuation of old, inefficient ways (Uttal, 1982).
Every company has its own individuality in the market; this individuality or the isolated quality can be taken as its competitive advantage. Competitive advantage of the company is something on what company is far ahead from it competitors.
The company, having a diverse workforce, is bound to have its impact on the effectiveness of the organization as well as on the career growth of an individual. One of the most important advantages of having a multicultural or diverse workforce is to attract the best available talent towards the organization. Such organization, which does not show any prejudice in recruiting, retaining and promoting the employees from diverse cultural and racial backgrounds easily gain competitive advantage and become able to sustain highest caliber of human resources (Adler, 1991).
Different studies have proved that organizations having diverse workforce and multicultural environment usually display better problem solving ability (Adler, 1991). Due to their multicultural workforce such organizations are more capable to understand the problem with different perspectives, meanings and interpretations and hence have more capability to solve problems.
Organizations need continuity, which can be achieved only through some change of adaptability and self-renewal. Multicultural organizations are designed specifically to find, accept, and use new ideas and so they are more able to adapt change and show more organizational flexibility. Different studies depicted that women possess higher tolerance for ambiguity than men (Rotter & O’Connell, 1982), similarly bilingual people possess more cognitive flexibility than monolingual (Lambert, 1977). Thus diverse workforce is an asset for the organizations while adapting change.
It can easily be summed up that having a diverse workforce and its proper management provides a number of advantages to the organizations. “Manage diversity well are more likely to gain competitive advantages, attain increased productivity from available human resources, and reduce the inter-group conflict cost” (Triandis, Kurowski, and Gelfand, 1994, p. 775).
But at the same time, too much diversity in the workforce may also cause ambiguity and confusion. Multicultural organizations sometimes find it difficult to reach to a single, unanimous decision because of the diversity in its workforce (Gannon, 2004).
Due to the presence of people from different cultural backgrounds, there is a chance of cultural clashes between the people of different cultures. There is also a chance that majority group members may create obstacles for minority group member to take full participation. If such clashes cannot be handled and managed by the leaders then the organization may suffer ineffectiveness, less productivity and absenteeism of the employees (Adler, 1991).
If there is communication gap between a culturally diverse team then there is a chance that a homogenous group may outperform this culturally diverse group. Multicultural organizations require extensive trainings to overcome the communication barrier otherwise it will not perform up to their potential (House and Javidan, 2004).
Managing Corporate Culture in Multicultural Organizations
Globalization is the process of expanding global preferences in cultural, environmental, political, social and economical issues. The key economic characteristic of globalization is the free movement of goods throughout the world (Schaeffer, 2003). Diversity and Globalization in the new economy and the present business situation has produced a work force made up of people all around the world. They have different life experiences, perspectives, preferences, values and style. This diversity of work force is reshaping and rewriting the way of doing business (Dorfman, Hanges and Brodbeck, 2004).
According to the Statistics the people filling jobs in the 2000s had a different racial and gender makeup than past employees. Native white males made up 47% of employees in 1989 but will constitute only 15% of new entrants. In the year 2000 Hispanic accounted for almost 28 percent of labor force growth and blacks about 17 percent. White women provided about 42 percent of labor force growth. Statistics have further depicted that by the year 2012 almost one-fifth of the total US workforce will be of 55 years or older (US Bureau of Labor Statistics, 1998). Hamilton has said that, “The great challenge facing the nation is to prepare a changing population to do new kinds of work. Failure imperils economic health, social progress, and democracy itself. (Hamilton, 1990; p.1).
This trend of workforce diversity compelled leaders of multi-cultural organizations to adapt the changes with special recruiting programs targeted towards these groups and organizational changes to accommodate their needs. Day-care centers, special benefit packages and language training have all become the part of the inducements to employees (Grisham and Walker, 2005).
In the present decade, the environment for organizations has changed radically (Olsen & JinLin, 1997). In the past, leaders usually emphasized on the internal affairs of the management but the changing environment requires them to emphasize more on externally oriented affairs. Many scholars are of the opinion that diversity in organizations is a source of strength if used properly otherwise it creates ethnic and cultural differences, conflicts etc. (Christensen & Hughes, 1992).
A study was conducted on transformational leadership in organizations, which depicted that leaders in organizations, who have a clear objective, strong sense of values and cultural differences and shown deep inclination towards high standards of ethics, are considered as models for others to follow (Tracy & Hinkin, 1994).
The following are some of the important points; an organizational leader has to consider while working in present global environment:
Changing Occupational Profile: At present, organizations try to provide more services to customers for the guaranteed customer’s satisfaction. This requires more knowledgeable and social employees. Major organizations also introduce some new posts like quality manager, yield manager, computer and technical service manager, management accounting expert and budget analyst to provide a wide range of services to their clients or customers (Turner and Mueller, 2005).
Developing Language Skills: in order to provide best services to culturally diverse clientele, major organizations provide different languages and culture training to their staff
Increased staff responsibility and job satisfaction: It is hard to get and retain a good and trained employee in present business scenario. Many organizations impose more responsibilities to their good employees in order to enhance their job satisfaction.
Proper Motivation: In order to retain good employees it is necessary to motivate them. Motivation is either Financial or non-financial.
Financial: wages, salaries, fringe benefits etc. are financial incentives. Many believe that these incentives help to attract the more desirable and qualified type of employee, decrease turnover, and maintain morale and performance.
Non-financial: these are known as personal incentives because they offer an opportunity to develop personal initiative and achievement. A number of research studies have proved the impact of these incentives on performance. Opportunity for advancement, challenge, the type of work, responsibility, good supervision, good working conditions, and recreational programs are some examples of non-financial incentives.
Changing and managing corporate culture is one of the major problems of managers and executives at all levels at the present era of cultural diversity. Leadership is the capacity to guide, direct, and influence the behavior of others, imaginative, toward given ends. The trait theory holds that leadership is inherent in the psychological makeup of individuals. The situational pattern views leadership as contingent on the needs and resources of a given situation. In a synthesis of these two patterns, we concluded that both have contributed ideas of value, that neither approach alone is satisfactory. The supervisor is traditionally viewed as the man in the middle; but although this is often a fair portrayal of his role, in reality his beliefs are closer to those of other managers than to those of non-managerial employees.
Managing and changing corporate culture in a multicultural environment is far more challenging than managing people in a uni-cultural environment. The leaders of cross cultural organizations have to use all the above-mentioned qualities as well as some extra qualities like emotional intelligence and understanding of different languages, values and cultures to manage and satisfy their followers more effectively.