Agents2Change - Smart Business Thinking

Reviewing 2011 – Crossing the Rubicon

As we look back at 2011, we can see that in many ways and for many reasons it was an extraordinary year.  From revolutions to natural disasters, from political coups to civic disorder, from CEO departures to economic meltdown we have seen them all. 

The Arab spring,  saw not only an unprecedented amount of public protest against political leaders, but perhaps another revolution was how the campagins were coordinated and how they spread so quickly.  It started in Tunisia, but moved to over a dozen countries and has seen the toppling of three governments.  Many protesters used Social Media to communicate, organise and collaborate.  It is a very powerful example of how communication and globalisation are changing and the impacts that this can have.

It was the year that Apple lost their iconic boss Steve Jobs, which will certainly challenge the group to continue its trajectory as the worlds most innovative company.  Another bosses departure of quite another kind was Carol Bartz who was  dismissed from Yahoo in September. The troubled group has an uncertain future ahead.

In March, the world looked on with aghast as one of the biggest natural disasters of all time hit Japan, killing some 20,000 people.  The horror took a macabre twist as the nuclear reactors in the area threatened to go into meltdown, which was heroically avoided.  Although it was in many ways a confirmation of the safety of nuclear reactors, many countries chose to view it as quite the opposite.

The economy has had a thoroughly bad year.  US and Europe continue to see slow or non-existent growth.  The Euro-zone has threated to implode in on itself with crisis after crisis throughout the year.  Key sectors continue to struggle, with Banking and Retail hit worst. 

Protests were a big feature of the year, with a wave of anti-capitalists protests, starting with the Occupy Wall Street campaign which quickly spread to many of the worlds financial capitals.

In the Summer, the UK saw a breakdown of civil order when widespread violence and looting broke out, following a police shooting incident.  For three days, widespread protests looting and arson became a common feature in many large cities and completely overwhelmed the local police forces. Commentators cynically noted that certain business proved to be incubated from the looting with one high street having every business targeted except the local bookshop.

Perhaps when our children and our children’s children look back on 2011, they will see it as a turning point.  But a turning point to what?  We will have to wait and see.

Examining Culture #7 - And finally! Building a Cultural Map

In this mini-series, we have looked at the challenges of managing across a diverse range of geographic and cultural boundaries. We have taken a look at the theories on national culture and organisational culture.  In this, our final instalment, we explain our approach to developing a cultural map in organisations.

The major growth strategy for multi-nationals has been heavily reliant on Mergers & Acquisitions  in recent years.  These have often been in key markets and geographic locations; for example there has been significant increase in Eastern Europe and South and Central America.  This brings access to new and growing markets for companies who have plateaued in their home countries, but it also brings cultural challenges in how best to integrate and align these target companies into the established corporate culture. 

The reason that integration and value creation is so difficult in the post-merger organisation is multi-fold.  Many reports and research papers conclude that the reasons for poor results are often down to poorly targeted acquisitions, unclear goals, unrealistic valuation of the target company and more often than not, an incompatible company culture. 

However culture is not an indefinable or unchangeable concept.  On the contrary, it can be defined, measured and with concerted effort, changed.  To do that, requires accurate diagnosis and practical ideas on how to address cultural needs.

Our View of Culture

Over the years, the Agents2change team have been brought in to address many issues around performance, improvement and integration in some of the world’s biggest companies.  Our combined expertise spans over 90 years of organisational change and understanding the key levers towards integration.  Indeed our founder, Mary McGuire has undertaken extensive research in the area of multi-cultural management at Masters level and is linked with a number of business schools. 

We apply our knowledge and understanding of the most  influential models and theorists on culture (from Hofstede to Schein) and have developed our own unique Cultural mapping model.  We take the view that there are certain cultural ‘flags’ that allow us to interpret, measure and intervene in culture to achieve integration. 

A central premise of our model, is the view that integration must come from a shared understanding of the direction and goals of the organisation.  This is impacted by a number of areas, including how motivated people feel, how equipped they are to do their job (knowledge) and whether they believe this is a company that they want to be associated with (commitment).

Building A Cultural Map

We have developed an exclusive internet survey that allows for the collation of data from small or large populations.  The survey takes only 15 minutes to complete and has the advantage of being customisable for an organisation’s own requirements.  Using sophisticated survey design, which allows for a mixture of response types, the questionnaire is intuitive to use and eminently user-friendly, as reflected in the very good completion rates we typically achieve.

What we deliver is understandable management reports, split by function or country and giving a thorough analysis and explanation of what the data is saying.  We also supply recommendations, based on our experience of what makes change stick and how to make it happen in geographically spread organisations. 

Cultural mapping can be done for any size of organisation to suit any budget.  We can do a small review for a team of 20 staff, or provide a global review covering several thousand staff in multiple languages.  Our approach is completely flexible and designed around your needs.  If you feel you could benefit from this service, contact Mary McGuire: mary@agents2change.com, for a confidential, no obligation discussion.

What experiences have you had with cross cultural conflicts?  Does this model help explain the reasons for those conflicts?  Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

Examining Culture #6 - 'That's just the tip of the Iceberg!'

In this mini-series, we are looking at the challenges of managing across a diverse range of geographic and cultural boundaries.   We have already looked at the key writers on National Culture.  Today we turn to organisational culture theory. 

Probably one of the most extensive writers of recent years is Edgar Schein of Massachusetts Institute of Technology (MiT) who has over the years provided much insight into the complexities of understanding and managing cultures within organisations.  He introduced the concept of Culture as an iceberg, in that those things that are observable on the surface are but a small percentage of the issues that are occurring underneath the surface.  

Schein describes culture as multi-layered.  At the visible layer we see artifacts and symbols that represent culture, which in turn come from beliefs and attitudes.  These all stem from basic assumptions that are  deep-rooted and often held at the sub-conscious level.   We don’t often think about how culture is expressed in organisations, and yet its influence is everywhere.  From the organisational structures, to the brand identity to the communications and visual art observable within the office.  It all speaks to the values and underlying assumptions of what this culture represents.  Apple and Google are probably the best proponents of culture as a tangible asset to be encouraged and encompassed by all employees.  Other headquarters such as banking and insurance, exude power and status messages to maintain status quo.  One sector is about game-changing and the other is about the old order. Both are valid, just different.

Schein went on to describe Three Cultures that arise in distinct occupational communities.  The Executive culture is about hierarchy and control.  The Engineering culture is concerned with design and process.  The Operators culture is concerned with the hands-on day-job, whether that be manufacturing or service based.   

When we look at how global companies today are often a made up of many legacy companies that have come together through acquisitions, each with their own distinct history and culture, this therefore poses some challenges for the post-merger integration efforts. 

What we at Agents2Change have found useful is some a cultural mapping exercise to help explain the key differences that occur across organisations.  We will look at this in more detail in our next and final instalment in this Culture series.

What experiences have you had with cross cultural conflicts?  Does this model help explain the reasons for those conflicts?  Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

 

 

Examining Culture #5 – The High’s and the Low’s of Cultural Difference

In this mini-series, we are looking at the challenges of managing across a diverse range of geographic and cultural boundaries.   We have already presented the findings of Hofstede,  Trompenaar & GLOBE.  Today we are looking at the last of the National Cultural theorist, Edward Hall.

 

In his book ‘Beyond Culture’ Hall took an anthropological approach to considering cultural differences.  In his book he looks at the various ways that societies deal with conflict, justice, truth and relationships.  He considers cultural differences from the perspective of how much meaning is interpreted through the context of the situation or how much relies on explicit messaging.  He introduces the concept of two main types of culture.  High Context – those which have meaning embedded in the fabric of life – through symbolism, rituals and relationships leading to short-hand or understated communication.  Low Context, by contrast, is more rule-bound, concerned with regulations and expectations, leading to explicit forms of communication.     See examples (below):

 

 

Hall’s model offers us insights into why some cultures spend more time codifying human behaviour and rules (Germany, America) and those that spend more time on relationships (Southern Europe).  We then see these differences manifest themselves through the way we, for example, develop statutes, run justice systems, appoint leaders etc.   

Another significant observation from Hall is relationship to Time.  Monochromic and Polychromic societies display differences in how they respond to and use time.  Monochromic  being those groups that take time as a finite resource, where punctuality is expected – ‘time is money’.  Polychromic groups view time as a flexible resource that can be juggled around the needs and priorities of relationships and tasks at hand.  We can easily imagine how business leaders from one group, negotiating and working with a leader from the other dimension, might well lead to frustration and conflict, merely because their approach to tasks and punctuality might vary.  Hall’s booked helped to highlight these difference and what might be the basis to them. 

Hall’s insights and models were developed from an anthropological perspective.   This means that his lens was both US based, but also concerned with human behaviour and rituals in the context of their unique evolution.  It was not developed with the business world in mind, unlike the other models, but it does provide a useful frame of reference in which to consider the manifestation of conflict and tensions across different national cultures.

What experiences have you had with cross cultural conflicts?  Does this model help explain the reasons for those conflicts?  Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

Examining Culture #4 - GLOBE - Linking Leadership to Culture

In this mini-series, we are looking at the challenges of managing across a diverse range of geographic and cultural boundaries.

We have already presented the findings of Hofstede and Fons Trompenaars.  Today we are looking at Global Leadership and Organizational Behavior Effectiveness or GLOBE as it is known.  Tomorrow we will review Hall, both very influential and insightful studies into Culture.

The research for GLOBE was initiated by Robert J House of the University of Pennsylvania in 1991.  His initial purpose was to find a way of measuring and defining the leadership qualities across different cultures.  Building on and expanding the seminal work of Hofstede, and that of other organisational theorists, House set about developing a multi-country, multi-organisational research program.  This has now encompassed over 16,000 middle managers in over 60 countries.   

 

Whilst there is clear overlap with the work of Hofstede  (see Hofstede 2010), it also brings some new insights, particularly in the area of leadership and leadership performance.  More particularly, GLOBE spans more than 951 organisations, rather than one entity, as in Hofstede’s case.  Shi & Wang in their thorough comparison of the two models, outline the differences in methodology below.

 

 

We cannot say by looking at this table, that one approach is better than the other.  We can say however, that they bring different aspects of data into the body of knowledge on multi-cultural management.  Hofstede was concerned with finding differences in national cultures, so only having one organisation, but one that could provide over 117,000 respondents still brought a larger data sample in which to achieve this task then had ever been done before. GLOBE, on the other hand, was a broader research piece, which looked at defining leadership qualities across different cultures.  Both are useful, but need to be considered within their respective frame of reference. 

The GLOBE model identified nine cultural dimensions, which as we can see from Table below, have parity with Hofstede’s model on many counts:

 

 

GLOBE enhances rather than detracts from the original work of Hofstede.  It goes one step further in looking at the impact of culture on organisational performance, through the introduction of the Performance Orientation dimension and the definition of institutional collectivism. 

Shi & Wang (2011) remind us that whilst “GLOBE study is less criticized than Hofstede’s work, possibly not because there are fewer controversial issues, but perhaps more because it is much more recent, and therefore researchers have not yet fully analysed and tested it” (P. 93)

GLOBE provides a framework that goes beyond the measuring management or only considering one organisation and systemically looks to gather data from across sectors and countries.  GLOBE goes one step further in linking culture to performance, and important advance in thinking of why culture? and why now?

As we see more and more mergers and acquisitions failing to deliver on promises and a global recession that is continuing to bite, GLOBE provides us with some through-provoking ideas about how we might continue to motivate and manage people across organisational and geographic boundaries.

 

Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

 

References

Hofstede G (2010) The GLOBE debate; Back to relevance, Journal of International business Tudeis, 41: 1339-1346

House RJ, Hanges PJ, Javidan M, Dorfman PW & Gputa V (2004) Culture, Leadership and Organizations: The  GLOBE study of 62 societies, Thousand Oaks, CA, Sage

Shi X & Wang J(2011) Interpreting Hofstede Model and GLOBE Model:  Which way to go for Cross-Cultural Research?, International Journal of Business and Management, 6(5), 93-98.

Examining Culture #3 - How Trompenaars describes the dimensions

In this mini-series, we are looking at the challenges of managing across a diverse range of geographic and cultural boundaries.

 

We have already presented the findings of Hofstede and today we look at Fons Trompenaar & tomorrow we will review GLOBE, both very influential and insightful studies into Culture.

 

Fons Trompenaars, who over 15 years and with 50,000 managers across the world has developed a model to describe cultural differences.  Often authored with Hampden-Turner whom together wrote their seminal work ‘Riding the Waves of Culture; in 1997,  he built a model around three key principles illustrated in below:

 

 

 

From this they developed a series of scenario based questions to test out how individuals react in these three areas, which led to 7 pairs of dichotomies described as dimensions, outlined in Figure 5 below:

 

 

 

 

At first glance, Trompenaars can be seen to make the picture of culture even more complex, when added to the picture that already emerges from Hofstede.  However on closer inspection, what we see is a re-framing of many areas that Hofstede termed slight differently.  For example what Hofstede terms High and Low power distance can map on to the Achievement ‘v’ Ascription scale here.  Similarly the Individualism and Collectivism scale from Hofstede has similar themes with Trompenaars.  Where they differ, is perhaps more attention in Trompenaars model to time (sequential ‘v’ Synchronic) and environment (Inner directed ‘v’ outer-directed), although even this, one could argue has some synergies with the masculine /feminism scale from Hofstede. 

 

Trompenaars, like Hofstede has had his critics.  His research which looked more at behaviour responses to scenarios to test out his concepts.  Based on a US model of relationship or task-based management, it is exclusively testing out management behaviour.  Hofstede (1996)  questions the reliability of the data  “A serious shortcoming of Trompenaars’ data bank which no professional analysis can correct is its evident lack of content validity”(P.197).  Others question the cultural biases and base assumptions ( Minko (2011 p.48) & St Claire-Ostwald (2007)).

However, even with these shortcomings, Trompenaars research helps us to consider culture both in the context of the organisation and the individual and attempts to link it to management behaviour.  Even a rudimentary audit of a global company, using Trompenaars framework would be insightful in identifying the cause of some of the differences and conflicts that might be present.

Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

 

References

Hofstede G (1996) A serious shortcoming of Trompenaars’ data bank which no professional analysis can correct is its evident lack of content validity International Journal of  Intercultural Relations, 20.(2) 189-198.

Minko M, (2011) Cultural Differences in a Globalizing World , Bingley, Emerald Publishing

St Claire-Ostwald B (2007) Carrying Cultural Baggage: the contribution of socio-cultural anthropology to cross-cultural coaching, International Journal of Evidence Based Coaching and Mentoring 5(2), 45-52

Trompenaars F and Hampden-Turner C (1997)Riding the Waves of Culture: Understanding Diversity in Global Business, NB Publishing

Examing Culture #2 - Is Hofstede's view of Culture relevant?

Hofstede is seen as one of the key writers and proponents of cultural theory, through his research in the late 1970’s and early 1980’s and to which he has continued to add.  His research was based on employees within one organisation – IBM and covered over 116,000 responses, 72 national subsidiaries and 20 language, taking the data at two points in time over a four year period.  When first published, over 20 years ago, it was one of the most extensive pieces of research in the area of culture and lead to some critical thinking of what characteristics are observable in different national cultures.

The central premise to Hofstede’s work is that Culture and cultural identity are learned attributes developed over time and he coined the process ‘mental programming’.  

 

We can see how culture is ever-changing, in the ways that values and priorities change from one generation to another.  For example, we can see if we look back at key decades in UK society, that values changed from:  Being frugal and economical in the 1940’s  (key themes: ‘War’ and ‘Rations’); being hard-working and strong family values in the 1950’s  (key themes:  Post-war Industrial growth); being expressive and freedom of speech in the 1960’s  (key themes: Feminism, Free Love, Student Revolts); being politically aware and experiencing hardships in the 1970’s  (Increased political unrest, widespread strikes and large scale unemployment).  Thus we can say that culture is at the same time traditional yet ever changing.  The shifts in cultural values are harder to view in the day-to-day, but evident when looked at through a longer lens. 

This brings some interesting challenges to modern day multi-nationals, as it means that cultural identity and values needs to be understood and observed to a point, but that people are open to and willing to change their values and priorities if it makes sense for them to do so. 

Culture can feel like an intangible and hard to grasp concept, yet it is both general – i.e. definable at a national or continental level; but also specific – i.e. definable at an organisational, team and even family level.   And for each of these situations a new set of norms might be applied. 

Hofstede originally defined  four dimensions of culture as a way of mapping and explaining differences in national cultures.  If we look at how European countries map out on these dimensions, we see some interesting patterns:

Each dimensions looks at a different aspect of human interactions:

1.            Power Distance:  Defining and prioritizing power in their environments – e.g.. how much are hierarchies respected and maintained

2.            Uncertainty Avoidance: How important is it to know what is coming next and how much effort is invested into avoiding uncertainty

3.            Individualism ‘v’ Collectivisim:  What is more important – to be known and respected as an individual or to be part of and respected as part of a community (or group effort)

4.            Masculine ‘v’ Feminine:     “Masculinity pertains to societies in which social gender roles are clearly distinct and focused on material success; femininity pertains to societies in which social gender roles overlaps (i.e. both men and women are supposed to be modest, tender and concerned with quality of life)” (Hofstede P.82)

To these original dimensions, a fifth was added – Long Term’v’ Short Term Orientation.

 

The dimensions give us a frame of reference in which to consider and view culture, and it does allow us to perhaps explain differences that emerge across different countries, even in one geographic regions such as Europe.  However Hofstede was at pains to point out that the purpose of his cultural landscape was not to allow us to fall in to the trap of stereotyping countries and national cultures.  Far from it, Hofstede believed that by having a frame of reference, we could free ourselves up from our own cultural bias, to look at cultures with a more objective lens. 

There are a number of issues with Hofstede’s study methods and conclusions, which remind us of the need to treat it critically.  The first is that the data is focused around the respondents in one organisation – IBM.  Whilst an organisation of sufficient size  (well over 120,000 employees at the time of the research) to provide a statistically significant sample, but that does not mean it is representative on a national level.    

Blodgett et al (2008) after examining Hofstede’s model conclude that “Hofstede’s cultural instrument lacks sufficient validity when applied at the individual unit of analysis”.  McSweeney B (2002) goes further to systematically deconstruct and debunk his theories stating that “The scale problem of Hofstede’s research is radially compounded by the narrowness of the population surveyed” and that Hofstede oversimplified the importance of organisational culture as a component and a relevant factor when matching samples across countries.  Yet despite this criticism, I think that St Claire-Ostwald (2007) offers wise words when she states  “To reject totally Hofstede’s or similar functionalist models of national culture, before more satisfactory models have been developed, would be to throw away valuable insight.”

Hofstede’s model still has influence on our current thinking of Culture and its interpretation.  One can see his influence in other important models, such as those of Trompenaars and GLOBE, which will be covered in the next section of this series. 

Culture is ever-present and all-pervasive and however much we want to imagine that business as usual can continue without it, it cannot.  However by becoming more aware of it, is the first step in managing its consequences.

Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

 

Further Reading:

Blodgett J, Bakir A &  Rose G (2008)  A Test of the Validity of Hofstede’s Cultural Framework, Advances in Consumer Research (Volume 35)

Hofstede G (1994) Cultures and Organizations: Intercultural cooperation and its importance for survival; Software of the Mind, London: HarperCollins

McSweeney, B. (2000). Hofstede's model of national cultural differences and their consequences: A triumph of faith – a failure of analysis. Human Relations, 55(1), 89-118.

St Claire-Ostwald B (2007) Carrying Cultural Baggage: the contribution of socio-cultural anthropology to cross-cultural coaching, International Journal of Evidence Based Coaching and Mentoring 5(2), 45-52