Lecture 7: Levels of organizational culture and macro-cultural influences on organizational structure and culture Flashcards
(93 cards)
1
Q
What are the competing perspectives discussed in Hartnell et al?
A
- Similarity perspective: Proposes that when CEO leadership behaviors align with organizational culture values, this creates consistent cues that help employees focus their efforts, leading to better performance.
- Dissimilarity perspective: Suggests that similarities between leadership and culture are inefficient due to redundancy, and CEOs are more effective when they provide resources not available in the existing culture.
2
Q
What are the important boundary conditions?
A
- Focus is on interaction effects rather than determining primary causality
- Does not address emergence of leadership or culture
- Context is established firms in high-tech industry with mostly non-founding CEOs
3
Q
What are the common thematic dimensions across leadership research?
A
- Task-oriented leaders: Focus on facilitating task accomplishment by defining roles, clarifying expectations, and encouraging standardized procedures
- Relationship-oriented leaders: Emphasize interpersonal support and positive relationships by encouraging participation, implementing suggestions, and treating members as equals
4
Q
What has evidence found about task and relational leadership?
A
- Qualitative studies of CEO failures reveal they often fail due to indecisiveness and poor implementation
- Mintzberg’s work identifies informational roles (task leadership) and interpersonal roles (relational leadership) as key for executives
- CEOs need these behaviors to implement strategies by aligning employee goals with organizational strategy
5
Q
Organizational culture problems
A
Organizational culture consists of shared values and norms that guide employees’ perceptions and behaviors. Organizations must solve: - External adaptation problems: Focus on task-oriented functions like meeting customer needs and monitoring competitors
- Internal integration problems: Focus on relationship-oriented processes like coordination and communication
Major culture frameworks contain these dimensions:
- Task cultures: Share values stressing task structuring, clear expectations, and goal achievement
- Relationship cultures: Share values emphasizing people development, cohesion, and collaboration
6
Q
What are the theoretical foundations for similarity benefits?
A
- Attribution theory: Consistency across stimuli makes cause-effect attributions clearer. Consistent leadership-culture cues provide clear behavioral expectations, enabling focused effort.
- Social identity theory of leadership: Leaders who conform to collective values (prototypical leaders) are attributed higher status and have more influence. Followers are more accepting of leaders who embody organizational values.
7
Q
What are the negative effects of dissimilarity?
A
- Cognitive dissonance theory: Inconsistent information creates psychological discomfort. Discrepancies between leadership and culture create uncertainty and ambiguity.
- Social identity theory: Leaders whose behaviors aren’t aligned with organizational values lack endorsement from members and may have less influence and trust.
8
Q
What are the theoretical foundations for dissimilarity benefits?
A
- Path-goal theory: Leaders should provide information and support not provided by the context. CEOs who provide task leadership when culture lacks task-orientation enhance performance by clarifying expectations.
- Functional leadership theory: Leaders should address whatever isn’t being adequately handled for group needs.
- Substitutes for leadership theory: Leadership is ineffective when accompanied by organizational characteristics with similar emphasis. Redundancies between leadership and culture may decrease effectiveness.
8
Q
What are the negative effects of similarity?
A
- Redundancy: High task leadership may be unnecessary in task-oriented cultures and could constrain autonomy and impair motivation.
- Overemphasis: High relational leadership in relationship cultures may overemphasize social integration at the expense of task performance.
9
Q
What are the hypotheses of Hartnell et al?
A
Hypothesis 1: When levels of task leadership and task culture are similar, firm performance will be higher than when levels of task leadership and task culture are dissimilar.
Hypothesis 2: When levels of relational leadership and relationship culture are similar, firm performance will be higher than when levels of relational leadership and relationship culture are dissimilar.
Hypothesis 3: When levels of task leadership and task culture are dissimilar, firm performance will be higher than when levels of task leadership and task culture are similar. [[6]]
Hypothesis 4: When levels of relational leadership and relationship culture are dissimilar, firm performance will be higher than when levels of relational leadership and relationship culture are similar.
Hypotheses are competing so cannot both be supported
10
Q
Method of Hartnell et al?
A
Top management teams rated the CEO’s leadership, CEOS and TMTs assessed culture, objective firm performance was return on assets. Measured task, relational leadership, relationship culture, firm performance, controlled for prior firm performance, firm size, CEO founder status, CEO tenure
11
Q
What were the results of Hartnell et al?
A
- significant negative interaction between task leadership and task culture
- similarity perspective was not supported as performance was lower when task leadership and culture were both high or both low-
- dissimilarity perspective supported: low task leadership- high task culture showed highest performance
- performance was lower when relational leadership and culture were similar than when they were dissimilar
- Performance was highest when levels of relational leadership and culture were dissimilar
- CEO founder status did not moderate the association between task leadership and task culture or between relational leadership and relationship culture
12
Q
What are the implications?
A
- culture can be a substitute for leadership, leadership can be effective when it provides resources lacking in the culture
- high task leadership may have negative effects by constraining autonomy
- culture’s impact on performance is conditional on other factors like Ceo leadership, task cultures correlate with performance while relationship cultures do not
-Dissimilar leadership-culture cues are effective when they avoid redundancies and increase efficiency - CEOs should be aware of organizational culture and adjust leadership styles accordingly
CEOs may need to adjust their style as the organization evolves
13
Q
Culture
A
Culture is defined as “the collective programming of the mind that distinguishes the members of one group or category of people from others.” It is always a collective phenomenon but can be connected to different collectives such as:
- Nations
- Ethnic groups
- Organizations
- Occupations
- Genders
- Generations
- Social classes
14
Q
What is the role of level of aggregation changes?
A
It changes the nature of the concept of culture:
- Societal, national, and gender cultures are deeply rooted, acquired from early youth
- Occupational cultures (acquired at school) and organizational cultures (acquired on the job) are more superficial and exchangeable
- Societal cultures reside in (often unconscious) values
- Organizational cultures reside in (visible and conscious) practices
15
Q
What are the universal categories of culture Kluckhohn?
A
suggesting all cultures provide answers to the same fundamental human questions (biological requirements, existence of two sexes, presence of different age groups, etc.)
16
Q
How did Hall divide cultures?
A
- High-context cultures (much information is implicit)
- Low-context cultures (nearly everything is explicit)
17
Q
What are the 5 pattern variables?
A
- Affectivity vs. affective neutrality
- Self-orientation vs. collectivity-orientation
- Universalism vs. particularism
- Ascription vs. achievement
- Specificity vs. diffuseness
18
Q
What are the 5 value orientations?
A
- Evaluation of human nature (evil - mixed - good)
- Relationship to environment (subjugation - harmony - mastery)
- Orientation in time (past - present - future)
- Orientation toward activity (being - being in becoming - doing)
- Relationships among people (linearity - collaterality - individualism)
19
Q
What is 2d ordering?
A
- ‘Group’ or inclusion - claims of groups over members
- ‘Grid’ or classification - degree to which interaction is subject to rules
20
Q
3 standard analytic issues
A
- Conception of self (including masculinity/femininity)
- Relation to authority
- Primary dilemmas and conflicts (including control of aggression and expression of affect)
21
Q
What are methodological weaknesses in many frameworks?
A
Lack of clarity about and mixing of levels of analysis (individual-group-culture). Inkeles and Levinson avoided this by focusing specifically on the national level.
22
Q
What were the IBM studies?
A
- Employees of IBM subsidiaries worldwide
- Over 100,000 questionnaires
- Key breakthrough: focusing on correlations between mean scores at country level
- Validation through management trainees outside IBM
- Factor analysis revealed four dimensions that corresponded to Inkeles and Levinson’s standard analytic issues
23
Q
Hofstede Dimensions
A
Original 4:
1. Power Distance: Related to human inequality
2. Uncertainty Avoidance: Related to stress in facing the unknown future
3. Individualism vs. Collectivism: Related to integration of individuals into groups
4. Masculinity vs. Femininity: Related to emotional gender roles
Additional:
5. Long-term vs short-term
6. Indulgence vs Restraint
24
How were the dimensions validated?
- Six major replications across 14+ countries
- Populations included elites, employees, managers, pilots, consumers, civil servants
- Important consideration: Control for national wealth (GNP per capita) when correlating dimensions with other variables
- Connection to Big Five personality dimensions at country level
25
Power distance
The extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally. Higher in East European, Latin, Asian and African countries; lower in Germanic and English-speaking Western countries
26
Characteristics of small power distance societies
- Power use should be legitimate and subject to criteria of good/evil
- Parents treat children as equals
- Older people neither respected nor feared
- Student-centered education
- Hierarchy means inequality of roles established for convenience
- Subordinates expect to be consulted
- Pluralist governments with peaceful transitions
- Corruption rare; scandals end political careers
- More even income distribution
- Religions stressing equality
27
Characteristics of large power distance societies
- Power is a basic fact; legitimacy is irrelevant
- Parents teach children obedience
- Older people respected and feared
- Teacher-centered education
- Hierarchy means existential inequality
- Subordinates expect to be told what to do
- Autocratic governments with revolutionary changes
- Corruption frequent; scandals covered up
- Uneven income distribution
- Hierarchical religions
28
Uncertainty avoidance
A society's tolerance for ambiguity and comfort with unstructured situations (novel, unknown, surprising, different from usual). Higher in East and Central European, Latin, Japanese, and German-speaking countries; lower in English-speaking, Nordic, and Chinese culture countries.
29
Weak uncertainty avoidance societies
- Acceptance of inherent uncertainty in life
- Lower stress, anxiety, and neuroticism
- Higher subjective well-being
- Tolerance for deviance and differences
- Comfort with ambiguity
- Teachers may say "I don't know"
- Changing jobs is not problematic
- Dislike of rules
- Citizens feel competent toward authorities
- Religious/philosophical relativism and empiricism
30
Strong uncertainty avoidance societies
- Uncertainty seen as continuous threat
- Higher stress, emotionality, anxiety
- Lower subjective well-being
- Intolerance of deviance
- Need for clarity and structure
- Teachers expected to have all answers
- People stay in jobs even if disliked
- Emotional need for rules
- Citizens feel incompetent toward authorities
- Belief in ultimate truths and grand theories
31
Individualism vs collectivism
The degree to which people in a society are integrated into groups. Individualism prevails in developed and Western countries; collectivism in less developed and Eastern countries; Japan takes a middle position.
32
Characteristics of individualist societies
- Everyone expected to care for self and immediate family only
- "I" consciousness
- Right to privacy
- Speaking one's mind valued
- Others classified as individuals
- Personal opinions expected
- Transgression leads to guilt
- Languages where "I" is indispensable
- Education purpose: learning how to learn
- Task prevails over relationship
33
Characteristics of collectivist societies
- People born into extended families/clans that protect them
- "We" consciousness
- Stress on belonging
- Harmony maintenance valued
- Others classified as in-group or out-group
- Opinions and votes predetermined by in-group
- Transgression leads to shame
- Languages where "I" is avoided
- Education purpose: learning how to do
- Relationship prevails over task
34
Masculinity vs femininity
The distribution of values between genders; the degree to which a society emphasizes traditional masculine values (assertiveness, competition) versus feminine values (modesty, caring). High in Japan, German-speaking countries, and some Latin countries like Italy and Mexico; moderately high in English-speaking Western countries; low in Nordic countries and Netherlands; moderately low in some Latin and Asian countries.
35
Feminine societies
- Minimal emotional/social role differentiation between genders
- Both men and women modest and caring
- Balance between family and work
- Sympathy for the weak
- Both parents deal with facts and feelings
- Both boys and girls may cry but neither should fight
- Mothers decide on number of children
- Many women in elected political positions
- Religion focuses on fellow humans
- Matter-of-fact attitudes about sexuality
36
Masculine societies
- Maximum emotional/social role differentiation
- Men should be assertive; women may be too
- Work prevails over family
- Admiration for the strong
- Fathers deal with facts, mothers with feelings
- Girls cry, boys don't; boys should fight back
- Fathers decide on family size
- Few women in elected positions
- Religion focuses on God or gods
- Moralistic attitudes about sexuality
37
Long term vs short-term orientation
The choice of focus for people's efforts - the future or the present and past. Long-term oriented are East Asian countries, followed by Eastern and Central Europe; medium-term orientation in South and North European and South Asian countries; short-term oriented are USA, Australia, Latin American, African and Muslim countries.
38
Short-term orientation societies
- Important events occurred in past or present
- Personal steadiness and stability valued
- Universal guidelines about good and evil
- Traditions are sacrosanct
- Family life guided by imperatives
- Pride in one's country
- Service to others is important
- Social spending and consumption
- Success/failure attributed to luck
- Slow/no economic growth in poor countries
39
Long-term orientation societies
- Most important events will occur in future
- A good person adapts to circumstances
- Good/evil depends on circumstances
- Traditions adaptable to changed circumstances
- Family life guided by shared tasks
- Learning from other countries
- Thrift and perseverance are important
- Large savings, funds available for investment
- Success attributed to effort, failure to lack of effort
- Fast economic growth until prosperity
40
Indulgence vs restraint
The extent to which a society allows relatively free gratification of basic and natural human desires related to enjoying life. Indulgence prevails in South and North America, Western Europe, and parts of Sub-Saharan Africa; restraint prevails in Eastern Europe, Asia, and the Muslim world; Mediterranean Europe takes a middle position.
41
Indulgent societies
- Higher percentage declaring themselves very happy
- Perception of personal life control
- Freedom of speech important
- Higher importance of leisure
- More likely to remember positive emotions
- Higher birthrates in educated populations
- More people actively involved in sports
- More obese people where food is plentiful
- Lenient sexual norms in wealthy countries
- Maintaining order not a high priority
42
Restrained societies
- Fewer very happy people
- Perception of helplessness
- Freedom of speech not a primary concern
- Lower importance of leisure
- Less likely to remember positive emotions
- Lower birthrates in educated populations
- Fewer people actively involved in sports
- Fewer obese people where food is plentiful
- Stricter sexual norms in wealthy countries
- Higher number of police officers
43
Shalom Shwartz Value survey
- 56 values scored by teachers and students in 50+ countries
- Seven dimensions at country level: Conservatism/Embeddedness, Hierarchy, Mastery, Affective autonomy, Intellectual autonomy, Egalitarianism, and Harmony
- Correlations with Hofstede dimensions: Individualism, Masculinity, Uncertainty Avoidance
44
Word values survey
- Ronald Inglehart identified two key factors:
- Well-being vs. survival (correlated with Individualism/Masculinity)
- Secular-rational vs. traditional authority (negatively correlated with Power Distance)
45
What were the updated dimensions of Minkov's recent work?
- Exclusionism vs. Universalism, Monumentalism vs. Flexumility, Industry vs. Indulgence
- Added "Hypometropia vs. Prudence" based on statistics (murder rates, HIV rates, adolescent fertility, IQ)
46
Job-oriented vs employee oriented
- Job-oriented: Responsibility for job performance only
- Employee-oriented: Broad responsibility for members' well-being
- Influenced by founder's philosophy and economic history
46
Process oriented vs results oriented
- Process-oriented: Dominated by technical and bureaucratic routines
- Results-oriented: Common concern for outcomes
- Associated with culture's homogeneity (strong cultures are results-oriented)
47
Professional vs parochial
- Professional: Members identify with their profession
- Parochial: Members derive identity from the organization
- Known in sociology as "local" vs. "cosmopolitan"
48
Open vs closed systems
- Refers to communication style and ease of admitting newcomers
- Shows national influence (e.g., Danish organizations more open than Dutch ones)
49
Tight vs loose control
- Degree of formality and punctuality
- Partly function of technology (banks = tight, ad agencies = loose)
50
Pragmatic vs normative
- Way of dealing with environment, especially customers
- Pragmatic: Flexible, service-oriented
- Normative: Rigid, rule-following
- Measures "customer orientation"
51
What are the levels of cultural analysis?
Culture can be analyzed at three different levels, ranging from visible manifestations to deeply embedded unconscious assumptions:
1. **Artifacts** - The visible and feelable phenomena of a culture
2. **Espoused Beliefs and Values** - The articulated ideals, goals, and aspirations
3. **Basic Underlying Assumptions** - The unconscious, taken-for-granted beliefs that determine behavior
Individual integrity is judged by the alignment between these three levels
52
What are artifacts?
Artifacts are the observable elements of culture that you can see, hear, and feel when encountering a new group. These include:
- Physical environment and architecture
- Language and technology
- Artistic creations
- Style (clothing, manners of address, emotional displays)
- Myths and stories
- Published values
- Observable rituals and ceremonies
- Organizational climate (a manifestation of culture)
- Behavior routines and rituals
- Structural elements (charters, formal descriptions, organization charts)
53
Why are artifacts difficult to observe?
Artifacts are easy to observe but difficult to decipher. What they mean to the group cannot be determined through observation alone, as interpretations will likely be projections of one's own cultural background
54
What are espoused beliefs and values?
These represent the articulated principles that a group claims to be following. They originate from:
- Someone's original beliefs and values (often a founder or leader)
- Solutions that worked in the past and became transformed into shared values
- Social validation processes
55
What processes can affect espoused values?
1. **Empirical testing** - Some beliefs can be tested and validated through experience
2. **Social validation** - Some beliefs cannot be tested but are confirmed through shared social experience
Not all espoused beliefs align with actual behaviour-> difference between espouses theories and theories-in-use
56
What are the basic underlying assumptions of culture?
These are the deepest level of culture - beliefs that have become so taken for granted that there is little variation within the social unit. Characteristics include:
- They were once hypotheses that worked repeatedly and became treated as reality
- They are non-confrontable and non-debatable
- They are extremely difficult to change
- Challenging them produces anxiety and defensive responses
- They define what to pay attention to, what things mean, and how to react emotionally
- They create a "thought world" or "mental map" that provides security
Changing basic assumptions requires "double-loop learning" or "frame breaking"
57
What is the metaphor of the lily pond?
The three levels of culture can be understood through the metaphor of a lily pond:
- **Blossoms and leaves** (visible on the surface) = Artifacts
- **Farmer's expectations and hopes** = Espoused values and beliefs
- **Seeds, roots, water quality, fertilizer** = Basic underlying assumptions (cultural DNA)
Leaders who want to change culture must address the cultural DNA, not just the visible manifestations
58
How can these levels be applied to the Digital Equipment Corporation?
It is a computer manufacturer. Artifacts include: open-office architecture, informality of dress and manners, dynamic environment, high interaction, few status prerequistes (like special parking places), inexpensive furniture. Espoused beliefs: personal responsibility, doing the right thing, push back, job autonomy, separation of conflict, integrity, work ethic and product quality. Assumptions: individual is source of creativity and innovation, truth is discovered through testing, part of one family, products can be improved by testing, achieving goals, solving costumer problems, market is best decision maker. centralized control is preferable. This represents, US macro-cultural values, family values, and founder's own cultural background. This was written down, explicit teaching using boot camps, modifications in areas like sales and service
59
Key insights from this case?
1. A young company's culture provides identity, meaning, and daily motivation. When successful, this culture becomes strong and explicitly part of its identity
2. Generalizations about culture must consider:
- Age, size, and underlying technology of the company
- How the company culture is nested in occupational and national macro cultures
3. The presence of the founder is a strong stabilizing force for culture, which can maintain cultural elements even when they become less adaptive to changing market conditions
Examining all levels is needed to understand org behaviour and performance.
60
How to learn about cultures?
When examining macro cultures, the three-level model of cultural analysis can be applied:
- **Artifactual level**: What we directly encounter as tourists or patients in healthcare settings
- **Espoused-values level**: Found in published ideologies of nations or mission statements of occupations
- **Basic assumptions**: Must be inferred through intensive observation, conversations with people, or systematic interviewing of "informants" (ethnography)
Learning about cultures can occur through:
- Direct travel experiences
- Literary accounts and ethnographies
- Guidebooks, films, novels, and artistic media
- Online resources (though their relevance to organizational issues may vary)
61
Hofstede's IBM study
- analyzed questionnaire responses from IBM employees across multiple nations. Found various dimensions
- individualism-collectivism: The degree to which society prioritizes individual rights and duties versus the group as the basic unit to which individuals should subordinate themselves. Surface behaviours may not always reflect deeper assumptions
- power distance: The social and psychological status and authority distance between highest and lowest powered people in society. Varies by occupation as higher among unskilled workers than professionals
- Masculinity-Femininity Distance: The degree to which gender roles are differentiated and linked to work versus home and family
- Tolerance for Ambiguity and Uncertainty: The degree to which members of society feel comfortable in uncertain circumstances; the need for clear structures and rules
- Short-Run vs. Long-Run Time Orientation: The degree to which members plan for the distant future versus focusing on the near future
62
Globe study
Surveyed middle managers across 25 countries, identified 9 dimensions:
1. **Power Distance**: Degree to which members expect power to be distributed equally
2. **Uncertainty Avoidance**: Extent to which a society relies on norms and rules to alleviate unpredictability
3. **Gender Egalitarianism**: Degree to which a collective minimizes gender inequality
4. **Future Orientation**: Extent to which individuals engage in future-oriented behaviors
5. **Collectivism I (Institutional)**: Degree to which institutional practices encourage collective distribution of resources
6. **Collectivism II (In-Group)**: Degree to which individuals express pride and loyalty in organizations or families
7. **Performance Orientation**: Degree to which a collective encourages excellence
8. **Assertiveness**: Degree to which individuals are assertive and confrontational
9. **Humane Orientation**: Degree to which a collective encourages fairness and kindness
63
Limitations of survey research
- Surveys reflect the researcher's preconceptions in the questions
- Individual responses may not reveal collective beliefs and norms
- Statistically derived dimensions may lack the depth that comes from ethnographic methods
64
What are context languages?
- **Language**: The most obvious cultural dimension; defines categories of perception and thought
- **High-context vs. Low-context languages**:
- High-context: Words/phrases are difficult to interpret without understanding context (e.g., British English)
- Low-context: Words are more precise and carry meaning clearly (e.g., Swiss German)
65
How to determine truth?
1. **Physical reality**: Things determined empirically by objective tests
2. **Social reality**: Matters of consensus not empirically determinable (e.g., political views, religious beliefs)
**Possible Criteria for Determining Truth:**
1. Pure dogma (tradition/religion)
2. Revealed dogma (authority of wise figures)
3. Truth derived by "rational-legal" process
4. Truth as that which survives conflict and debate
5. Truth as that which works (pragmatic criterion)
6. Truth established by scientific method
66
Moralism vs pragmatism
- **Moralistic cultures**: Seek validation in general philosophy or moral system (e.g., Europeans)
- **Pragmatic cultures**: Seek validation in personal experience (e.g., Americans)
67
What is the role of information?
Cultures differ in what constitutes data, information, and knowledge. Issues include:
- The reliability of "big data"
- The validity of statistical relationships
- The interpretation of correlations as causation
68
What are the different orientations towards time?
- **Past-oriented**: Some Native American tribes
- **Present-oriented**: Spanish-Americans
- **Near future-oriented**: Anglo-Americans
- **Long-range planning**: Japan
- **Short-run planning**: Hong Kong
- **Monochronic time** (U.S. managers): Time as a linear ribbon divided into appointments; only one thing can be done at a time; "time is money"
- **Polychronic time** (Southern Europe, Africa, Middle East): Time defined by accomplishments rather than clocks; several things can be done simultaneously
- **Cyclical time** (Some Asian societies): Time as recurring series of phases
- **Planning time** (Managers): Linear, monochronic time with targets and milestones
- **Development time** (Scientists): "Things take as long as they take"; follows natural processes
69
What are the symbolic meanings of space?
- **Personal space**: Varies by culture; formal relationships conducted with greater distance
- **Flight distance**: Distance that triggers fleeing when intruded upon
- **Critical distance**: Distance that triggers attacking behavior when intruded upon
- **Intrusion distance**: How far to remain from others in conversation
- Space allocation symbolizes status (higher floors, private bathrooms, office size)
- Building design reflects cultural values
- Physical layout guides behavior and reinforces norms
70
What is the role of body language?
- Use of gestures, body position, and physical cues communicates status and intimacy
- Rituals of deference and demeanor reinforce hierarchical relationships
- Cultural misinterpretation of body language can lead to misunderstandings
71
What is the time, space and activity interaction?
- Monochronic time requires private spaces (offices with doors)
- Polychronic time requires open spaces for simultaneous events
- Building design considers both distance and time in physical layout
- Information technology shrinks time and space (virtual teams)
72
Shared assumptions
- What it means to be human
- Whether humans are basically good, evil, or mixed
- Whether human nature is perfectible
73
Worker motivation assumptions
1. Workers as rational-economic actors
2. Workers as social animals with primarily social needs
3. Workers as problem solvers and self-actualizers
4. Workers as complex and malleable
74
Motivation theories
- **Economic self-interest**: Early dominant theory
- **Social needs**: Hawthorne studies showed social motivation often overrides economic self-interest
- **Self-actualization**: Maslow's hierarchy of needs - individuals work on "higher" needs only after lower ones are satisfied
75
How do humans relate to their environment?
1. **The "Doing" Orientation**:
- Nature can be controlled and manipulated
- Pragmatic approach to reality
- Belief in human perfectibility
- Predominant in United States ("getting things done")
- Organizations seek to grow and dominate markets
2. **The "Being" Orientation**:
- Nature is powerful and humans are subservient
- Fatalistic worldview
- Focus on enjoying the present
- Organizations look for niches to survive and adapt to external realities
3. **The "Being-in-Becoming" Orientation**:
- Achieving harmony with nature through self-development
- Focus on what a person can become rather than accomplish
- Development of self as an integrated whole
- Organizations vary in how they define and encourage growth
76
What are the 4 levels of relationships in society?
1. **Level -1: Exploitation/No Relationship**
- Examples: Prisoners, slaves, extreme cultural differences
- No expected trust or openness
2. **Level 1: Acknowledgment, Civility, Transactional Role Relations**
- Examples: Strangers, service providers, professional helpers
- Polite openness but maintaining "professional distance"
3. **Level 2: Recognition as Unique Person; Working Relationships**
- Examples: Casual friendships, team members, work colleagues
- Deeper trust: honoring commitments, not undermining each other, not withholding relevant information
4. **Level 3: Strong Emotions—Close Friendships, Love and Intimacy**
- Relationships with stronger positive emotions
- Usually viewed as undesirable in work situations
- Active mutual support
77
What does Vaara et al's research look at?
This article examines the effects of organizational and national cultural differences on international acquisitions, focusing specifically on social conflict and knowledge transfer. The authors argue that the ambiguous findings in previous research on cultural differences in acquisitions can be explained by disentangling the various effects these differences have on post-acquisition outcomes
- Cultural differences can have both positive and negative effects on acquisitions
- Previous research has produced mixed results about the impact of cultural differences
- The paper focuses on two key outcomes: social conflict and knowledge transfer
- The authors distinguish between organizational and national cultural differences
78
What did previous research find about international acquisitions?
- most of it has focussed on cultural distance or fit between the acquiring and acquired organizations
- - Most studies have considered cultural differences as causes of poor acquisition performance
- Some research suggests that acquisitions from culturally closer nations lead to better outcomes
- Other studies propose that cultural differences can be a source of capability development and value creation
- Critics note that few studies have included both national and organizational cultural factors in the same analysis
- Some researchers focus on acculturation processes rather than cultural distance
- Others emphasize the "constructed" nature of cultural differences and their link to identity-building
- ambiguity about how cultural differences affect post-acquisition outcomes
79
What is the role of cultural differences in identity building?
- Identity-building revolves around social categories activated during organizational change
- People tend to associate similarity in beliefs and values with attractiveness and trustworthiness
- This often results in in-group vs. out-group biases, amplified by uncertainty
- These divisions can lead to confrontation between the two organizational sides
- Differences in organizational and national culture between the acquiring and the acquired firms are positively associated with social conflict
80
What is the role of organizational membership?
particularly salient social category in acquisitions, more so than national identity. They cite empirical support from previous studies showing that:
- Organizational cultural differences were negatively associated with employee commitment in domestic acquisitions
- National cultural differences were positively associated with attitudinal outcomes in cross-border acquisitions
- Cross-border acquisitions were not associated with higher levels of cultural difficulties than domestic ones
- Differences in national culture between the acquiring and the acquired firms are less positively associated with social conflict than are differences in organizational culture
81
How do cultural differences lead to learning?
cultural differences can also lead to learning due to diversity and increased knowledge base [[5-7]]. They define knowledge transfer broadly as the beneficial use of knowledge, capabilities, or skills from one organization in another.
- Different beliefs, values, and practices relate to different forms of knowledge useful to the other party
- International acquisitions provide access to knowledge embedded in local environments
- Greater cultural distance increases the likelihood of complementary capabilities
82
How can cultural differences create problems for knowledge transfer?
- The receiving unit's potential absorptive capacity
- The ability to identify, acquire and assimilate capabilities
- The ability to "teach" the receiving organization
- Despite these potential barriers, the authors argue that the complementary potential will have a stronger impact than the barriers
Hypothesis 2a: Differences in organizational and national culture between the acquiring and the acquired firms are positively associated with knowledge transfer
83
Why could organizational cultural differences be more problematic for knowledge transfer than national cultural differences?
- Substantial organizational differences may hamper identification and implementation of useful knowledge
- People in the receiving unit may have difficulty evaluating potential advantages
- Incompatibilities in beliefs, values, and norms may impede successful knowledge transfer
This reasoning leads to:
**Hypothesis 2b**: Differences in organizational culture between the acquiring and the acquired firms are less positively associated with knowledge transfer than are differences in national culture
84
What is the role of operational integration?
- focus is on how managers' integration approach affects post-acquisition outcomes, focusing on operational integration (standardizing work procedures and systems, removing overlapping operations)
- operational integration may increase negative effects of identity-building because:
- Integration decisions can be interpreted as threats to the culture and identity of the focal organization
- Loss of autonomy is a key concern for people in acquired organizations
- Acquisitions requiring high operational integration result in significant organizational changes
This leads to:
**Hypothesis 3**: The level of operational integration is positively associated with social conflict
85
Why does learning increase with operational integration?
- Integration provides opportunities for people from both organizations to interact and learn
- Standardized procedures make it easier to see value in and acquire knowledge from the other organization
- Integration may facilitate transfer of tacit knowledge through articulation and codification
This reasoning results in:
**Hypothesis 4**: The level of operational integration is positively associated with post-acquisition knowledge transfer
86
What is the influence of social conflict on knowledge transfer?
The authors argue that knowledge transfer requires individuals to share and exchange knowledge, which is affected by social factors. They note that:
- Knowledge transfer requires constant social interaction based on social cohesion and trust
- Mistrust, conflicting views, and organizational politics are major obstacles for knowledge transfer
- Previous research has shown how fears of exploitation and contamination impede knowledge transfer
This leads to:
**Hypothesis 5**: Social conflict is negatively associated with post-acquisition knowledge transfer
87
What is the method of Vaarna et al?
Examined foreign acquisitions of Finnis firms through 3 cross-sectional surveys conducted 1-3 years after the acquisitions. They focused on related acquisitions that led to concrete integration efforts. Multiple countries were represented, and measured org cultural differences (differences in management, control, sales and marketing), national cultural differences, operational integration (overlaps, standardization of practices and integration decisions), social conflict (different opinions, cooperation issues, conflict and mistrust) and knowledge transfer (benefits across org functions)
88
What were the findings of Vaarna et al?
**H1a**: Organizational cultural differences were positively associated with social conflict. However, contrary to the hypothesis, national cultural differences were negatively associated with social conflict
**H1b**: Supported. National cultural differences were less positively (actually negatively) associated with social conflict than organizational cultural differences.
**H2a**: Supported. Both organizational cultural differences and national cultural differences were positively associated with knowledge transfer.
**H2b**: Not supported. The relationship between organizational cultural differences and knowledge transfer was not statistically different from the relationship between national cultural differences and knowledge transfer.
**H3**: Not supported. No significant relationship was found between operational integration and social conflict
**H4**: Supported. Operational integration was positively associated with knowledge transfer
**H5**: Supported. Social conflict was negatively associated with knowledge transfer
89
What were the main conclusions?
1. It's important to disentangle the various effects of cultural differences on international acquisitions. Cultural differences affect knowledge transfer through two paths: a negative indirect effect through social identity-building and conflict, and a positive direct effect through learning.
2. The effects of national and organizational cultural differences are distinctly different. Organizational cultural differences, not national cultural differences, appear to be the root causes of conflict. This suggests that national and organizational factors should not be lumped together in research and practice.
3. National cultural differences seem to be less problematic in international acquisitions than commonly assumed. In fact, they were negatively associated with social conflict and positively associated with knowledge transfer.
90
Limitations of Vaarna et al?
- The sample reflects the special characteristics of Finnish corporate acquisitions
- The cross-sectional nature limits causal conclusions
- There's a potential level-of-analysis problem with firm-level and national-level variables
- Use of perceptual measures creates potential for retrospective recall and common method bias
- The measures were modified from prior studies
- The study primarily measured views of key decision-makers from acquiring firms
91
What should future research focus on Vaarna et al?
- Examine these processes in other national cultural settings
- Use data from a wider range of organizational representatives
- Conduct longitudinal, ethnographic, or interview-based analyses
- Further analyze the various factors often grouped under "cultural differences"
- Investigate mediating and moderating variables
- Pay greater attention to human resource management practices and other interventions
- This study advances our understanding of how cultural differences affect post-acquisition integration by showing that organizational and national cultural differences have distinct effects on social conflict and knowledge transfer in international acquisitions.
