Organizational Psychology in Cross Cultural Perspective

Colin P. Silverthorne

• Publisher: NYU Press
• Year: 2005
• ISBN:
  9780814739860
• Topic: Psychology
• Subtopic: History & Theory in Psychology
• Index: Psychology

The last two decades have seen an explosive increase in the ethnic diversity of the workforce, growth in international business, and the emergence of many more multinational companies.

The potential for problems as companies operate across borders and managers manage in countries which have different values, norms and cultural behaviors is great. By looking at organizational psychology in a cross-cultural context, we can gain an understanding of the challenges facing organizations and business today.

This text breaks new ground in introducing organizational psychology from a cross cultural perspective. It provides a foundational overview of the current major theories in organizational psychology, and illuminates the impact of cultural differences on organizational dynamics. It also makes available specific research concerning our current understandings of how these dynamics play out in particular regions and countries, such as autocratic versus democratic leadership styles in Africa and Europe or conflict management in Asia. The volume offers a welcome introduction to the topic to those in industrial/organizational psychology, international relations and management, and international business/MBA programs focusing on international issues.

1
Introduction

Playwright George Bernard Shaw once said, “England and America are two countries divided by a common language.” In many respects, this quote can be considered an analogy for the issues we will discuss in this book. Every country has managers who manage, but when we define what that means, it is not unusual to see that although we speak the same language, what we mean by what we say is quite different. Obviously, as companies operate across borders and managers manage in other countries, the potential for problems is great. Organizational psychology provides a framework for understanding individual and organizational behavior. The discipline combines research from social psychology and organizational behavior, with an emphasis on leadership, teams, motivation, values, and attitudes. Cross-cultural psychology provides a framework for understanding differences and similarities in individual and social functioning across cultures. By looking at organizational psychology in a cross-cultural context, we can prepare individuals and organizations for the current challenges facing organizations today. These challenges include an increase in the cultural diversity of the work force, particularly in the United States and Europe; the growth in international business; the emergence of many more multinational companies; mergers and acquisitions across national boundaries; the role of government in regulating, deregulating, or privatizing organizations; and the emergence of high-technology and telecommunication systems (Erez, 1994). All of these challenges and changes have accelerated cross-cultural communications and exposed more companies and individuals to the different values, norms, and behaviors that are found in other cultures.

I learned at an early age that companies operating outside their home-country environment can run into problems because of cultural differences. When I was a teenager in England, we lived near a major automobile factory. I always thought it was a British company but found out differently when the parent American company stepped in to run the factory. After years of labor problems, poor quality, and low productivity, the American parent company decided they had had enough and could run the factory much better. Within a week of the American takeover of management, the workers were involved in one of the longest strikes in company history, as the Americans tried to apply their American business practices in a British work environment. Their biggest mistakes did not concern critical organizational issues such as productivity or procedures or automation, but rather the way they treated the tea ladies and the way workers should take their breaks. The absolute ignorance of or blindness to cultural behaviors in British factories caused a bigger problem than any of the traditional conflict issues such as wages, productivity, and working conditions and, in this case, led to a very long strike. This lack of understanding of cultural differences in the workplace and the resulting problems gave me an early insight into the power of cultural differences and the serious negative consequences of ignorance and ethnocentrism.

Why Is National Culture Important in Organizations?

Organizations are operating in a global environment that has increased competition throughout the world. Countries can no longer depend on a protected domestic market while at the same time exporting to other countries to protect jobs and generate revenue. Trade barriers have come down, and countries have made significant changes to their trade policies. Now, more than ever, organizations must do everything possible to become or remain competitive.

Culture involves pervasive and deeply held implicit beliefs. Because cultures vary and different societies do not share all the same values, it is reasonable to believe that individual behavior will also vary across cultures. And there is ample evidence that national culture will have an affect on behavior at work. Cultural norms influence a manager’s behavior, as well as an employee’s behavior and reactions to managerial and organizational actions. Based on their research findings, L. Gardenswartz and A. Rowe (2001) identified five areas that they considered to be particularly important in organizations operating across cultures: hierarchy and status, group versus individual orientation, time consciousness, communication styles and patterns, and conflict resolution.

There are also ways to consider managerial behavioral differences across cultures, such as the simple descriptive management cultural definitions of differences based on an east, west, north, or south distinction: Western management is action oriented; Northern management is thought oriented; Southern management is family oriented; and Eastern management is group oriented (Gatley and Lessem, 1995). Clearly, culture influences how we behave in meetings, how we respond to conflict and feedback, and even how we speak and stand. There is a benefit in being able to see patterns of behavior within cultures, but there is also the danger that we are oversimplifying the complex variables that make up a culture. Understanding these issues and how they affect managers enhances our ability to create open and productive relationships.

What Is Organizational Psychology?

The earliest book on industrial/organizational psychology was published in 1913, and industrial/organizational researchers played an active role in helping the U.S. military develop tests of mental ability during World War I. These efforts led to the rapid development of the field of psychological testing. Initially, most of this research was directed toward helping the military place recruits appropriately and identify potential leaders as quickly as possible. Organizational psychology grew and developed more rapidly following the human relations movement that began in the early 1940s. Now, almost one hundred years later, psychologists continue their endeavors in a wide array of business, military, academic, and nonprofit settings.

Traditional organizational psychology has focused on understanding individual behavior within organizations and includes such topics as motivation, leadership, personnel psychology, employee behavior, employee attitudes and values, and managerial and organizational behavior. In a broad sense, personnel psychology includes all aspects of individual behavior. It places an emphasis on identifying the skills and abilities needed for particular jobs and on selecting, training, and evaluating employees. Effective selection procedures help ensure that employees will be successful, and training and evaluation ensure that employees remain effective and contributing members within the organization. Organizational behavior looks at how organizations influence employees’ attitudes and behaviors while at work. Topics in organizational behavior include role-related behaviors, the impact of team and group membership, commitment to the organization, and patterns of communication. While personnel psychology focuses on the individual-level issues, organizational behavior focuses more on group-level issues.

Organizational psychology is dedicated to developing the tools to help improve organizations. The field of organizational development is concerned with changing organizations to make them more effective. In the twenty-first century, global competition is growing. One trend is to seek out the least expensive labor markets, just as companies sought out the least expensive natural resources from around the world in the seventeenth and eighteenth centuries. Companies must compete on the basis of labor costs and technological innovations.

The change in the way organizations are established and operate in the current global economy has resulted in a need to reexamine what we think we know about organizational psychology and behavior. By the early 1970s, there was a growing awareness that managerial and organizational behavior varied across nations (e.g., Massie and Luytjes, 1972). It is now generally accepted that any application of a theory of management needs to take cultural factors into consideration. This is best demonstrated by the report of a case-study exam based on a conflict between two department heads within the same company (Hofstede, 1997). All students were given the same case, but the interpretations of the cause of and best solution to the conflict were quite different. The French students saw the problem as the general manager’s negligence in handling the conflict. They thought the person who was the boss of the two department heads should issue orders to settle the problem. The German students thought the problem was caused by a lack of structure, which was best resolved by establishing specific procedures. The British students saw the problem as one of human relations, best solved by giving training to the individuals involved to improve their negotiating skills. Thus, students from three different cultures attributed the same problem to three different causes and made recommendations for three unique solutions. Similarly, the importance of the role of culture was reinforced when managers from France, Germany, and the United Kingdom, working for an American multinational company, were found to be even more French, German, or British than their fellow countrymen working for domestic companies. Thus, with greater exposure to other cultures, the managers had a greater identification with their own cultural beliefs (Laurent, 1983).

Most of the organizational psychology and behavior research has been undertaken in the United States, as has been the development of many of the major theories currently in use. While the majority of theories of management have a Western and generally an American perspective, we cannot assume that management and organizational theories currently valid and/or popular within the United States have universal value or applicability (Hofstede, 1993). Fortunately, the amount of research in organizational psychology has recently been growing in countries such as the United Kingdom, Canada, Australia, New Zealand, Germany, the Netherlands, and Hong Kong.

The future challenges to organizational psychology involve being useful, relevant, and valuable to organizations. In order to maintain a viable research program, new theories need to be developed and tested using rigorous research approaches, with the goal of developing insights that can be used to help organizations function more effectively and to help employees feel valued, secure, and motivated. In a global economy where companies operate across borders and within cultures other than the home culture, differences in the perception and interpretation of the concept of management, managerial styles, leadership, and work motivation can lead to significant problems. Therefore, any application of organizational psychology theories needs to take cultural differences into consideration.

The Goals of This Book

It is time to begin to pull together ideas and research from around the world to better understand how we can apply this new and growing body of knowledge in a global environment. There is also value in applying some of the knowledge gathered from other cultures to organizations within the United States and other countries, given the increasing diversity of the work force. The purpose of this book is to help begin this process. The book is designed to consider relevant theories of organizational psychology and behavior in different cultures. From these findings, similarities and differences are considered and conclusions drawn about the applicability or nonapplicability of some of the major theories of organizational behavior and psychology to other cultures. A particular emphasis is placed on non-Western cultures where cultural value systems are the most different from those found in America and Europe.

Several areas of organizational psychology typically included in books on this subject have received little or no attention from researchers in other cultures. In addition, the emphasis of most of the research has been on highlighting differences and similarities between cultures rather than explaining why these differences and similarities exist and how they can be exploited for competitive advantage. Given these limitations in the published research in organizational behavior and psychology, perhaps this book will encourage others to explore this important and fertile research area. In this way, the mission of organizational psychology to help companies improve and prosper can be continued in a global context.

2
Foundations of Organizations and Culture

The careless application of theories of organizational psychology across cultures is fraught with danger because research has found that, while there are similarities, the differences between organizations operating in distinct cultural and societal settings are significant (Lammers and Hickson, 1979). The similarities tend to be consistent for the same types of business and organizational structure (Hickson, Hinings and McMillan, 1981), though there can be considerable variance between organizations operating as similar organizational types but in different societies in such areas as employee-management relations, communication within the organization, and staff involvement in decision making (Maurice, Sorge, and Warner, 1980).

Even though the role of a manager is generally consistent across organizations and cultures, managerial styles can vary substantially. While the evidence available from research on managerial styles in different cultures is limited, distinct social systems can have a considerable impact on management systems, which, in turn, affects managerial styles. Further, research in international settings has clearly shown that management techniques developed in and for a particular culture or country do not always produce the same results in other cultures (Adler, 1997).

The effectiveness of a manager is, in part, based on the values that the manager holds and his or her ability to motivate employees. Values are influenced by both the nationality of the manager and the business environment within which the individual manages (Adler and Bartholomew, 1992). These values guide the selection and evaluation of managerial behaviors such as techniques for motivating subordinates (Terpstra and David, 1990) and enhancing employee job satisfaction (Trice and Beyer, 1993). Style of organizational leadership has also been shown to be a relevant variable in the implementation of management practices (Atwater and Wright, 1996). The norms established by the leader and by the organizational culture allow employees to make sense of their organizational world; if that world makes sense to them, they are likely to be more productive and more satisfied with their jobs.

Organizations in Western cultures have embraced the idea of organizational-development interventions designed to enhance organizational effectiveness at the individual and organizational levels. However, organizational-development interventions can be influenced by culture, resulting in reduced, negative, or nonexistent change outcomes. This suggests that in multinational companies some adaptation of organizational-development interventions is necessary. The primary and recurring issue is whether a subsidiary is influenced more by the parent-company culture or the local culture. A comparison of American, Japanese, European, and Hong Kong Chinese multinational companies indicates that organizational-development interventions differ by country, primarily as a function of the organization’s home-country culture. American and European organizations are most likely to use, both at home and in subsidiaries, organizational-development interventions than Asian companies. Chinese firms have been found to be less open to individual-level interventions and more open to system-level changes, given their long-term orientation. Evidence indicates that organizational-development interventions that take place at a system level can be used independently of culture, while individual-level interventions are more affected by cultural differences and are, therefore, more likely to need to be adapted to local-culture needs (Lau and Ngo, 2001).

Anyone who has visited other countries knows that differences exist in language, mannerisms, dress, and customs. But in addition, there are hidden differences that are less obvious. Being able to speak the language can help to highlight these differences, but Americans are often at a disadvantage in this regard, since being fluent in another language is the exception rather than the rule for most nonimmigrants in the United States. However, culture and the perception of cultural differences are hard to define and explain, and it must be remembered that while culture suggests similarities and uniformity within a society, there is also a wide range of individual differences.

Hofstede’s Classification of Culture

One of the most significant studies to look at the role of cultures within a single organization operating across many parts of the world was conducted by the Dutch researcher Geert Hofstede (1984). His research played a significant role in generating interest and additional research in multicultural settings, and it is important to discuss in some detail because of both the influence of his studies and theoretical framework on cross-cultural research and the controversy it has generated.

Specifically, Hofstede looked at the work-related attitudes and values of comparable groups of managers working in a multinational company that operated in forty countries. The research began in 1967 and continued between 1971 and 1973, when surveys completed by over one hundred thousand IBM employees in different countries were tabulated and analyzed. To help in maintaining the comparability of the groups, only employees from the marketing and servicing divisions of the company were included in the sample. The data was collected using questionnaires, and the answers from those surveyed were averaged for each country. Then scores were developed for each country, and these scores were analyzed using a factor-analysis technique designed to isolate the key factors that account for the majority of the variation in the employees’ responses. Based on this analysis, Hofstede theorized that cultural differences could be usefully described by using four bipolar dimensions.

Power Distance

The bipolar ends of this dimension are high and low, and it measures the level of inequality between people that is considered normal in the culture. The concept of power distance implies that in a hierarchical organization, people in power will try to maintain their power, keeping power distance high. The level of power distance helps to define who has the power in the organization to make decisions in general and specific types of decisions in particular, as well as to help prescribe rules and procedures within the organization. In high-power-distance cultures, such as Malaysia, subordinates accept their status and respect formal hierarchical authority. Cultures low in power distance, such as Israel, will have organizations in which managers are willing to share authority.

Individualism-Collectivism

This dimension is the degree to which people prefer to work as individuals rather than as group members. Cultures high in individualism, such as the United States, respect and value personal achievement, autonomy, and innovation. Concern is for yourself as an individual rather than the group to which you belong, and people tend to classify one another on the basis of individual characteristics rather than group membership. On the other hand, cultures high in collectivism, such as Taiwan, emphasize group harmony, social order, loyalty, and personal relationships. Individual contributions are not valued if they work against group goals or interests. In order to maintain harmony in a collectivist culture, it is often necessary to be conservative and cautious. The majority of countries are collectivist, where group membership dictates a person’s loyalty and identification and the interests of the group take precedence over the interests of the individual.

Masculinity-Femininity

This dimension is the degree to which perceived typically masculine attributes (e.g., assertiveness, success, and competition) prevail over perceived typically feminine attributes (e.g., sensitivity and concern for others). Cultures high in masculinity, such as Japan, are more likely to be male dominated, especially in management, whereas cultures high in femininity, such as Sweden, are more likely to have women in managerial and professional positions. In addition, masculine societies are more likely to define occupations by gender, whereas in feminine cultures women and men can do any job and are not restricted by gender-role stereotypes.

Uncertainty Avoidance

The bipolar ends of this dimension are high and low, and it measures the degree to which individuals prefer structure to a lack of structure. The concept of uncertainty avoidance suggests that countries high in this dimension have high stress levels and design rules and norms to reduce uncertainty or ambiguity to the greatest extent possible. Cultures high in uncertainty avoidance tend to be uncomfortable or insecure with risks, disorganization, and unstructured situations and will try to control their environments by creating laws, rules, and institutions. This is manifested in lifetime-employment practices in countries such as Japan and Greece. Cultures low in uncertainty avoidance are more likely to accept differences in society, and people in these cultures are more curious about discovering and trying new things. The result is more job mobility, as seen in countries such as the United States and Denmark. Uncertainty can be due to human behavior or the nature of the environment, and it shapes the organizational mechanisms that are used to control and coordinate activities (Hofstede, 1984).

While these four dimensions form the basis of Hofstede’s theory of cultural classification of differences between cultures, there have been numerous changes and additions suggested to his list. For example, since Hofstede is Dutch, it is possible that his research had a b...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Contents
• 1 Introduction
• 2 Foundations of Organizations and Culture
• 3 Culture and Organizations
• 4 Organizational and National Culture
• 5 Leadership in Organizations
• 6 Leadership in Other Cultures
• 7 Work Motivation
• 8 Managerial Values and Skills
• 9 The Impact of Cultural Values on Problem Solving, Teams, Gender, Stress, and Ethics
• 10 Job Satisfaction and Organizational Commitment
• 11 Conflict and Power
• 12 Communication and Negotiation
• 13 Personnel Psychology and Human Resource Management
• 14 Some Final Thoughts
• References
• Name Index
• Subject Index
• About the Author