Lecture notes in Human Resource Management

Human Resource Management and Organizational Behavior Lecture notes and difference between human resource management and organizational behavior
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Human Resource Management and Organizational Behaviour Lecture notes ©Drs Joan Harvey and George Erdos Introduction These notes form the basis for the course and constitute essential reading. The approach in this course is as follows: a introduction to OB and HRM, the underlying disciplines of work psychology and sociology b individual aspects of work and consumer behaviour c group behaviour and group influence d organizational behaviour and culture e cross-cultural and international issues There will be case studies used to illustrate most of the major areas, and analyses of these plus presentations is part of the assignment requirement. Contents Chapter 1: Introduction to work psychology, OB &HRM Chapter 2: Culture and structure Chapter 3: International and cross-cultural issues Chapter 4: Perception Chapter 5: Learning and memory; training and development Chapter 6: Motivation, incentives and emotion at work Chapter 7: Communications and persuasion Chapter 8: Attitudes Chapter 9: Individual differences and assessment Chapter 10: Leadership and authority Chapter 11: Groups Chapter 12: Change Chapter 13 International HRM 2 ©copyright Dr Joan Harvey Chapter 1 Introduction to Organizational Behaviour and Human Resource Management 3 ©copyright Dr Joan Harvey Origins in Psychology and OB/HRM The main traditions in psychology are relevant to areas of application in OB and HRM, examples are given below, with comments: i Psychoanalytic tradition: not a dominant influence, but may explain some aspects of emotionality in the workplace, consumer motivation and how people respond to groups and leaders ii Trait tradition: related to psychometric testing for recruitment, selection and development iii Phenomenological tradition: started with encounter groups Carl Rogers in 1950s which then evolved into sensitivity training at work; later evolution into TQM total quality management and similar approaches. Also the self-actualisation side from humanistic psychology relevant to motivation at work iv Behaviourism tradition: many applications, including reward systems at work, performance management, behaviour modification approaches and mentoring. Generally relevant to appraisal, OD, training and career and personal development. v Social cognitive tradition: this may be applied into areas of occupational which involve schemas and information processing, so could for example be relevant to how we process social information in the interview, or help our understanding of organizational culture. Work psychology has its origins in 2 main component parts: a Fitting the man to the job/fitting the job to the man FMJ/FJM. FMJ involves career guidance, recruitment and selection, appraisal, training and development. FJM involves equipment and workplace design, work and job design, human-machine interaction, impact of physical, social and economic environment on the individual. The origins of FMJ/FJM go back to job design for the munitions workers in WW1, Taylorism, selection tests for the forces in WW2, assessment centres for the Office of Strategic Services the OSS, US equivalent of SAS, Hawthorne experiments, measurement of intelligence by Spearman, etc. b Human relations. Early areas within human relations included heavy emphases on socio-technical systems and motivation theory in work design. The approach also now includes areas such as organizational structure and culture, change management and resistance to change, social construction theory, organization theory, different approaches to management and management style. The origins of the Human relations approach go back to the Hawthorne experiments; Maslow; Woodward and socio-technical systems and cybernetics; theories of organization hierarchy structure and culture; Edgar Schein and process consultation; Vroom and Porter and Lawler on expectancy and utility theories; etc. Origins in Sociology These origins go back to Durkheim, Marx etc. There are origins in studies of industrialisation, the role of management, alienation and the assembly, lines, bureaucracy and organizational theory. Many books are relevant here, such as Douglas MacGregor's 'The Human side of Enterprise', Erving Goffman's 'Psychic Prisons' and David Goldsmith et al's series of books called 'The Affluent Worker' in the 1960s which investigated the extent to which earning money yielded power and position in the workplace. Earlier in the 1950s, Walker and Guest's book 'Man on the Assembly Line" and in the 1960s Joanne Woodward's writing on socio-technical systems were seminal in the development of this area of understanding behaviour in the workplace. Sociology has resulted in several influences on how we understanding organizations: one from the perspective of organizational theory, particularly critical organization theory which often challenges findings from positivist research. Another influence is in reflexivity, whereby interventions are evaluated by the interventionist. A further major influence has been in terms of how we study industrial relations. 4 ©copyright Dr Joan Harvey The changing world of work There are four main areas of change in the last few decades that need to be considered throughout this course: a Technological changes IT has reduced demand for labour, in some cases by 90% in manufacturing. It has also created new jobs, such as those in software development. But the jobs lost and the jobs created are not the same. IT has also changed many existing jobs by de-skilling some parts, increasing skills in others, changing the composition of tasks and creating a great dependence on computers in many cases. There are also aspects of human-machine interaction to be considered, such as the ergonomic issues associated with large amount of time seated and in front of VDUs. New jobs have included those in call centres how much are these now the 'new sweatshops' of the 2000s?, often with highly prescribed and controlled work. New issues involve home-working, which now includes not only the computer and software issues but also social interaction and group issues. Virtual teams need special consideration, for example when the team members come from different cultures. b Economic changes These include issues of payment and wages, changes in benefits, work harmonisation, performance management, use of contracted and agency workers, full-time vs. part-time work, homeworking, relocation to where jobs are and possible cross- cultural issues. c Demographic changes HR planning was important in the 1970s and even, despite job losses, in the 1980s. By 1990s, changes in the demographics of the population were pointing towards emphasis on younger recruits, but by 2000 the emphasis shifted again and will change yet again in the 2010s as the actuarial 'time bomb' kicks in. d Rights and Roles These have changed a lot in 50 years, moving towards issues such as equal opportunities and diversity, increases in numbers of women in the labour market, bringing dual career stress. These look set to continue to have major influences on the world of work. Issues for the future in the changing world of work The further changes in IT will mean major issues of trust, security, new forms of organization virtual organizations, ebusiness, teleworking etc.. Changes in employment legislation will mean organizations focusing increasingly on their core competencies for their core workforce, resulting in few lifetime careers and employment security as non-core competencies are done by agency and sub- contracted workers. The demographic problems will get worse in the next 25 years as large amounts of skills are lost through retirements; also fewer workers will be earning relative to the numbers of pensioners, and this will be exacerbated by the failures of company and government pension schemes to have continued their investments by short term expediency. Possible rises in retirement ages due to needs of employers as well as needs of individuals to earn money. Increased emphasis on knowledge management, performance management will change many jobs. Economic changes as companies increasingly refocus on service and knowledge industries and also, for example advanced manufacturing, energy generation and new technologies in UK. New issues in recruitment and selection will include biodata, conditional reasoning, virtual reality measures, genetic testing, neurological testing, electronic selection methods and measurement of Emotional Intelligence. Reference: Arnold J, Cooper CL and Robertson IT (2010) Work Psychology. London: FT/Pitman 5 ©copyright Dr Joan Harvey Chapter 2: Culture and structure in organizations 6 ©copyright Dr Joan Harvey 1 Introduction "Organizations are social arrangements for the controlled performance of collective goals". There are very many types of social arrangements e.g. clubs and societies. What distinguishes organizations from them is the preoccupation with performance and the need for control. Organizations do not have goals- only people have goals. The goals that individual members of an organization seek to achieve can be quite different from the collective purpose of their organized activity. This creates a central practical and theoretical problem in the design and study of organizations; it is called the organizational dilemma, arising from the inconsistency between individual goals e.g. self-esteem, pride, status, money, etc. and the collective purpose of the organization increased share income, reputation, investment, large product range etc.. Organization theory must take into account: structure-whether flat with few levels, or tall with many levels; the span of control in terms of number of subordinates per manager; the time-span of discretion; the ratio of those employed directly on the product/service to those employed indirectly. The links between grade and the routes to reach them are also part of this study of organizations. The British armed forces, for example, have for many years had carefully designed progress routes mapped out so that it is clear to all what qualifications and experience are pre-requisites for promotion. Should the jobs be broken down into narrow areas for specialization, or widened to give greater scope and responsibility? Should jobs and departments be grouped together in a functional way or according to the services or products offered? Should control be centralised or decentralised? These are all questions of organizational structure with no absolutely right answers. The areas of study and theory of organizations change slowly with time and are also vastly different between countries: there are differences, for example, between France, Britain and Germany concerning grades, payments, job structures etc. even for comparable jobs. The whole issue of whether organizational theory has any universality at all has been raised in many recent textbooks and articles. It is now clear that the theory must be rethought for different cultures; there are no easy prescriptions derived from Western texts that can be applied for Asian, South American or African organizations. Culture Hofstede defines culture as the "collective programming of the mind which distinguishes one category of people from another", being entirely learned and specific to the group. At the centre of culture are values, which are reflected in national culture. But culture resides in a social environment, so there are also practices, which are mostly how organizational cultures are defined. Culture in organizations has also in the past been more narrowly defined as: "the ideologies, beliefs and deep-set values which occur in all firms....., and are the prescriptions for the ways in which people should work in those organizations" Harrison, 1972 or as "its customary and traditional way of thinking and doing things, which is shared to a greater or lesser degree by all members, and which the new members must learn and at least partially accept, in order to be accepted into the services of the firm" Jaques, 1952 There are many different ways of describing cultures but most can be better interpreted, as Hofstede suggests, as sets of rules and norms of behaviour. Thus, we refer to for example an "absence culture" as those norms of absence and attendance which typify a certain group- in some groups it is normal not to take time off work unless one is severely ill whereas in other groups it would be the norm to take time off for very minor ailments. Groups develop norms for all sorts of behaviours quite quickly and these rapidly become established. Indeed, "custom and practice", which means well-established norms of work behaviour, has been cited often as justification for behaviour that management disapprove of in industrial tribunals. Workgroup norms have been extensively studied in many settings. It has been shown that workgroups which are high producers are not always those who are the happiest and that some very satisfied groups have low work rate norms. Where individuals break the norms by "rate busting" or by doing too little, they may be ostracised their workmates. These principles apply wherever people work together, even if they do not have interacting jobs. What we cannot explain is why some groups develop norms for hard work whereas other groups develop norms for much less work. Changing norms and values is difficult and takes a long time but it is possible to achieve some movement if carefully planned. Handy 1985 has derived four main ways of classifying culture: 7 ©copyright Dr Joan Harvey a Power Cultures Perhaps one or possibly a 'clique' of power holders. The structure is best represented as a web and can frequently be seen in smaller, entrepreneurial organizations, or smaller units of larger organizations. The organization depends on trust and empathy for its effectiveness, there are few rules and procedures and communication is often by personal contact. Working in such organizations requires that employees correctly anticipate what is expected of them from the power holders and perform accordingly. If this anticipation is right, people can be very happy and committed to the 'corporate goals'; if it is wrong, then dissatisfaction, high labour turnover as well as a general lack of enthusiasm can result. Thus, because a lot of faith is invested in the individual rather than in committees, the selection and choice of the 'right' employees by the centre is crucial to this type of organization. In a power culture that is working well, there is flexibility, decision-making unencumbered by rules and bureaucracy, a stimulating environment. In a power culture that is not working well, there is little back-up and a lot of 'faith' which may mean things go badly wrong. If the decision is to operate with a power culture, then work units need to be kept small it is difficult to retain this culture in a large unit and unit managers would have maximum independence. b Role Cultures This culture has lots of rules - for jobs, performance, disputes, recruitment etc. and the structure is bureaucratic. Role cultures are very common in older, well-established organizations, especially those who are not developing very fast. Performance that digresses from the rules, either by doing too little or too much, can be dysfunctional or counterproductive. Power is predominantly endowed by position rather than by any other base. Individuals can acquire specialist expertise without risk and are offered a predictable rate of climb up a pillar. The reward system is based upon satisficing, i.e. doing a job up to standard. These cultures are predictable and stable and can be efficient if the environment changes little over time. If there are long product life cycles, a large amount of programmed work, or if economies of scale are more important than innovation and flexibility, then role cultures will operate well. The biggest problem in these cultures is built-in inertia; when situations need to change, these cultures cannot easily adapt, nor can they handle experimentation to any degree. Local Government in the UK and the Marketing Boards in Zimbabwe are good examples of this type of culture. c Task Culture This culture has no central single power source endowed by hierarchical location. Senior management allocates projects to various parts of the organization and projects are worked on and developed by teams of people, who may only be together for that project alone. The team may cross functions and levels, relying on expertise rather than subjugated authority. Task culture is often associated with a matrix structure in organizations. For such structures to work, teamwork is more important than individual effort or reward. If individuals feel that their skills are superior to those of others in the team, then the culture can be badly damaged. The strength of a task culture is that it is flexible and responsive. It also has features which are considered in the Western culture to be desirable for motivating individuals, such as personal space and freedom, less routine work etc. The disadvantages of a task culture are that economies of scale cannot be exploited, since work is project rather than quantity based; there are relatively short life-cycles; the culture needs maintenance for it to continue to work and there may be resistance if it is introduced because of the extra managing required. There may also be budgetary implications because project groups may need their activities to be underwritten if the project is to be successful. Task groups can be very difficult to control once they are underway, since group members may become motivated to sustain the group rather than achieve organizational goals. In practice, task culture can be extremely effective. But it can also be quite disastrous if there is insufficient money, or role ambiguity or role conflict because of the 'pull' on the individual from both sides of the matrix. 8 ©copyright Dr Joan Harvey Role culture and bureaucratic Power culture and web structure structure Power Core Task culture and matrix structure Person culture and cluster structure functional areas o o o o o o o o o o o project o o areas o o o o Although the arrows are unidirectional in these diagrams, many will also operate in reverse directions, reflecting 2-way communication. However, the reverse arrows may not be in the same position as the ones in the diagrams because upward communication may follow different routes. d Person Culture. This a relatively uncommon form of culture, found in pockets of large, complex organizations, where individuals of similar background or training or profession cluster and form into groups to enhance their expertise and share knowledge, skills, ambitions and personal aims. This type of group can be seen amongst professionals such as lawyers, accountants, architects etc. These cultures rarely persist for long, becoming role or power cultures as the organization slowly takes on a life of its own that is less dependent on purely professional expertise. 2 Approaches to studying Culture Management theories and approaches Historically, writers have attempted to define the good manager- in terms of function and activity, derived from what the 'theory' said it should be, what factors differentiate good from bad, where the manager 'fits' in the organization, as a leader It can easily be seen that some theories are complementary whereas others directly conflict with one another. Summarised below are some of the main groups of theories and theorists Classical functional management theories, eg Fayol, Mintzberg, Drucker, Role and trait theories- eg Herzberg, McGregor, Sloan, Iacocca, Whyte, Lupton, Bingham, Carlson 9 ©copyright Dr Joan Harvey Behavioural approaches- eg Cyert-March, Schein, Management as Competence- eg Boyzatkis, Quality- eg Crosby, Deming, Leadership theories, eg Fleishman, Fiedler, Blake-Mouton, Ohio and Michigan studies, Systems theory/ socio-technical theory- eg Burns-Stalker, Woodward, Walker-Guest, Katz-Kahn Management of Change- eg Schein, Bennis, Argyris, Likert, Reddin, Beckhard, Tichy Defining excellence- eg Peters, Waterman, Hickman & Silva, Scientific Management-eg Taylor, Urwick Contingency theories- eg Vroom-Yetton, Porter-Lawler, Fiedler, Lawrence-Lorsche Management techniques- eg Kepner-Tregoe, Drucker, Blake-Mouton, Blanchard-Johnson, Humble, Adair. Also JIT, TQM etc Management processes- eg Schumpeter, Simon, Cyert-March, Management 'Gurus' - eg Kanter, Peters, Herzberg, Deming, Gellerman Strategic Management- eg Ansoff, Porter, Thurley-Wirdenius Cultural differences- eg Hofstede, McClelland, England Management philosophy- eg Edstrom, McGregor, Brown Management as power/authority- eg Cartwright, Dalton, Fox, Dahrendorf Human Relations- eg Mayo-Roethlisberger, Tavistock Institute Managing of innovation- Koestler, Brown, Jacques, Burns-Stalker, Leavitt, Burnside All these different theoretical positions may be boiled down into two schools of thought. The first of these, the "Applicable" approach says that getting the culture 'right' for the organization is critical for corporate success; it is also critical for human resource management to be effective, in achieving commitment to organizational goals and strategies. The 'Excellence' literature e.g. Peters and Waterman, 1982 suggests that cultures designed to facilitate innovation, experimentation, corporate entrepreneurship with heavy investment in human resources, are often more successful. The types of organization that they defined as successful were those who were very profitable, were developing new ideas or who were generally acclaimed at being very good at what they did; such as McDonalds , 3Ms , DisneyWorld in California and Florida and Apple Macintosh. These organizations have set out to reward in some way behaviours that are experimental or innovative or involve good personal interaction, etc. This research presents a 'snapshot' of success during the late 1970s and early 1980s, and does not examine what would be associated with success in the future. Nevertheless, the methodology of comparing the best with the rest is sensible enough; indeed the current 'leading edge' research 1994- 95, at London Business School uses exactly the same approach. The results are probably valid for that time and raise issues that cannot be ignored even though priorities may have changed or that some of these issues are culture-bound. We need to consider what behaviours we will reward. If innovative behaviour is important, then we should reward attempts to innovate rather than the outcomes. If excellence in personal handling of customers is important, then we should seek ways of recognising and rewarding that. and so on. This issue is currently causing huge problems in the managing of people, because the whole nature of the psychological contract is changing fundamentally in the 1990s, with extreme lowering of morale and commitment in many organizations e.g., Cooper, 1995. It is likely that excellence depends upon different characteristics at different times. Some of the so-called excellent companies have slipped from their pedestals and it now seems likely that the superiority of Japanese companies will be partly eroded. So it may be even less clear whether there is much at all in common for different organizational cultures that are "excellent" at any point. Very few organizations exhibit one culture only; nearly all show a mixture and most change slowly over time. Most organizational activities reflect the predominant or prevailing culture, with all its idiosyncrasies, which is likely to be the one operated by the senior management if there is a consensus between them. The process needed to introduce changes to the culture involve the analysis of the current system(s), deciding on some target for change and then planning a strategy to achieve it. This is a long and complex process and currently many international organizations are trying to achieve major cultural shifts. Peters and Waterman 1982 identified eight basic attributes of corporate success, all of which stem from getting the culture right. To these has been added an extra attribute suggested by Schwartz and Davies 1981: Bias for action- 'getting on with it', as opposed to forever analysing without taking decisions to act. Close to the customer- learning from clients and aiming for quality, reliability and service. Autonomy and Entrepreneurship- fostering the organization's leaders and innovators Productivity through people- we/they attitudes are unhelpful, the labour force are the root of quality and productivity Hands-on, value driven- managers should keep in touch with all areas of the organization 'Stick to the knitting'- staying close to the businesses you know Simple form, lean staff- keep organizational structure simple and top management levels 'lean' Simultaneous loose-tight properties- core values centralised, autonomy and development decentralised. Innovation/experimentalism orientation- a culture which favours these and to which all staff are committed. 10 ©copyright Dr Joan Harvey The other school of thought is the "Analytical" approach, and this involves examining the history of the organization, the dominant mores and ideologies of its nation. The beliefs, attitudes and values of managers are related to the dominant belief systems in the wider, national context. This approach also incorporates the role of language in the formation of culture, because it is the primary way that the 'rules' of the culture are passed from employee to employee. The analytical approach enables us to understand cultural differences in the way that organizations function; this has been particularly important in the understanding of differing cultures in the large multi-nationals. For many years, there have been cross-cultural investigations within multi-nationals in order to maximise their operations in widely differing situations and environments. Ford motor company have, for example, tried to identify crucial differences in managerial style across their factories in the UK, Europe and the USA. More recently, Japanese companies have researched into the optimum way, in terms of structure, grading systems, lines of authority etc., of setting up their operations in UK and other European countries. Not all of the multi-nationals have addressed these issues particularly well and some have considerable problems with their different national operations. Studies of cross-cultural differences in multi-nationals should show how organizations develop in different cultures but the literature is fairly spartan in this area, particularly when we look at behavioural rather than economic factors. Writers such as John Harvey-Jones suggest that they fail to see how Japanese business principles can work in the UK or the West, yet others say the opposite. New research e.g. Fisher, 1995 is beginning to tease out whether the relevant issues for cross-cultural management are concerned with skills, cultural sensitivity, differing cultural values etc. In the UK many organizations have been attempting major cultural changes. But this has also been happening at National level. From 1979 until 1990, Margaret Thatcher tried to change the culture of the nation to one of personal ownership, personal responsibility, enterprise, and reduced state dependence. There was also an inherent drive towards greater accountability and efficiency in many large state institutions such as the National Health Service and parastatals such as British Rail, whose whole natures were neither profit nor efficiency-centred. It can be argued that the culture-shift required was too much in too short a time, but nevertheless, there has been some obvious movement towards those goals. Referring to Peters and Waterman's eight attributes, it can be seen that Mrs Thatcher and her ministers certainly had a 'bias for action', acted a great deal with the customer in mind some would argue too much on some occasions, emphasised entrepreneurship, had centralised core values, and by the 'opting out' allowed to schools and hospitals, decentralised autonomy and development. Mrs Thatcher's administration was itself characterised by many as a power culture, although she attempted to encourage organizations, particularly in the public sector, to develop task cultures. Her successor, John Major, seems to political observers, to have moved away from a power culture in his administration, toward a consensus-based task culture. His approach to public sector organizations and parastatals seems to be similarly to Mrs Thatcher's a task-based one but with some additional concern for the public as customers. At the organizational level, some industrialists have become very famous in their attempts to change corporate culture. Early examples included Iain McGregor, who became chairman of British Steel, at a time when it was well and truly in the doldrums. To use Handy terminology, it was a role culture of the most bureaucratic kind and heavily in debt; morale was low and the organization was losing out to foreign competition. McGregor set out to make British Steel competitive, and amongst other things such as increased investment, embarked about changing the general dominant culture to a task one. This was reinforced by making clear the consequences of poor performance with redundancies, although these were also due to improvements in technology which considerably reduced the demand for labour. Following his 'success' a competitive company, with a much reduced workforce at British Steel, Mr McGregor was appointed chairman of the Coal Board renamed now British Coal where he tried to commence a similar strategy. This was much less successful, since it involved a major piece of industrial action, whereby a union leader attempted to bring the Coal Board management to its knees with an all-out strike. The strike was not all-out, caused much grief amongst the coal-mining community and resulted in a rather painful 'win' for Mr McGregor and the government. It can be said that this was a major contributor to the erosion of trades union power in the UK; it can also be said that union power was invested in a few people in a non-democratic way. These examples raise many issues for the study of organizations. In particular, the issue of organizational change and its dependence on cooperation and commitment can be seen clearly in the above cases. It can also be seen that to facilitate change of this magnitude requires fairly assertive and strong-willed individuals supported by teams of senior employees who are committed to the change. Another well-known figure in the UK who achieved significant changes in his organization is Sir John Harvey-Jones, who in the 1980s changed the culture from a bureaucratic, role-based one to a more dynamic one, although still role-based it would have been impossible to achieve a complete culture change and to what?. The company, ICI, had been in a real slump in the early 1980s. Harvey-Jones removed several managerial layers, and said that new ones could only be introduced if it could be 11 ©copyright Dr Joan Harvey shown that the new layer could do a unique job to create 'added value'. He opened up communications, made objectives clearer, changed the remuneration system to make it more fairly reflect contribution, changed responsibilities to stretch people, gave managers 'headroom' to make decisions. All of these constituted structural changes to the fabric of the company, although there was little cultural shift in terms of Handy's categorization. It could be said, using the original definitions of culture instead of the four categories that Handy derived, that Harvey-Jones did achieve changes in the culture, in that innovation was encouraged more and bureaucracy was reduced and the relationships between performance and recognition/reward was more clearly stated. It is interesting to observe that many of these activities are more common now than then and have been renamed to suit the 1990s- such as delayering, 'rightsizing' and empowerment. The implementation of these is indicative of the fundamental changes currently occurring in organizations and the drastically altered expectations etc. associated with the psychological contract. 3 Choice of Culture If one was in the position of being able to choose and implement a structure for an organization, or if an existing culture required change, what factors need to be considered? 1 History and Ownership. Centralised ownership will lead toward a power culture, whereas diffused ownership will produce a diffused power structure. New organizations need to be aggressive and independent power culture or flexible adaptable and sensitive task culture. Mergers can create special problems where two differing cultures are required to combine. 2 Size. Larger organizations are seen to be more formalized, develop specialised groups clusters?, operate role cultures, even though they may be linked together in a sort of web; they are also seen to be potentially more friendly and are thought by employees as being more efficient and more authoritarian, than are smaller organizations. This phenomenon also extends to workgroups, where the highest size before communications start to change and sub-groups form is eight in the group. Different work-groups can develop quite different norms and show some cultural differences. 3 Technology. Routine, programmable operations are more suited to role cultures; high cost, expensive technologies where the cost of breakdown is high tend to encourage close monitoring and supervision and require depth of expertise- all of these are best situated in a role culture. Technologies where there are large economies of scale to be made tend to encourage role cultures., whereas non-continuous, discrete operations, one-off unit production operations are best suited to power or task cultures. Where technologies are rapidly changing, task or power cultures are most effective. Tasks where there is a high degree of interdependence , or where uniformity and co-ordination are more important than adaptability are all best situated in a role culture. 4 Goals and Objectives. If the goal is : -quality of product, this is more easily monitored in a role culture. -to provide jobs, a good place to work, this is best in a role culture -to produce growth, this is best in a power or task culture. 5 The Environment Different nationalities prefer different cultures. These are explained in a later section of these notes. The implications of these differences are interesting for many reasons, but particularly so with the development of Japanese management methods in many companies. The Japanese, according to Hofstede, are more collective, cautious, authoritarian and materialistic than many other countries, which raises the issue of how well many management methods can work in differing environments. 6 The People. Individuals with a low tolerance of ambiguity, or high needs for security will be best suited to a role culture. Also, lower calibre people will best respond where jobs can be precisely defined, as in a role culture. Individual skills and talents will be more marked in power or task cultures, and a need to "establish one's identity at work" to 'make ones mark' will be better suited to these cultures. A mismatch between individual and culture, i e putting someone into a culture which they find unsuitable or alien, can have consequences for productivity, morale, absenteeism, etc. 4 Organization Design and Development 12 ©copyright Dr Joan Harvey Organizational design is the process of implementing an appropriate organization structure and culture However, organizations gradually change their dominant cultures: most start as power cultures, and as they mature, develop specialization, become more formalised, and move toward role cultures. Then, there develops the need for flexibility, perhaps new technology becomes needed for progress, and the organization is faced with the fact that it needs a range of different cultures. Any organization has four sets of activities, which may require cultural diversity: steady state- all those activities which can be programmed, are routine. This usually accounts for 80% of an organization's personnel - the infrastructure, production, secretarial system, accounts, sales etc. innovation- all activities directed to changing the things that the organization does or the way that it does them. R & D, parts of marketing, production development, corporate planning, O & M, parts of finance. crisis- all the parts that deal with the unexpected, such as parts of marketing and production, maintenance, middle management are the sectors most exposed in this activity. policy- all that activity concerned with priorities, setting standards, allocation of resources, initiation of action. There may be a policy department, but also top management are included here. It is suggested that differing cultures are appropriate to these four main activities. These activities overlap to some degree: steady state -role culture innovation- task culture crisis/breakdown- power culture policy- power culture So, if the appropriate culture prevails where that set of activities prevails, then that part of the organization is supposed to be more effective. Organizations should differentiate their cultures and structures according to the dominant kind of activity in that department, division or section. One culture should not be allowed to swamp an organization. Too often, organizations wish to bring everything into the steady state, which they think will lead to greater security but which also leads to decay. Similarly, a task culture or a power culture is likely to be inappropriate for the bulk of an organization's activities. An individual who is right for one culture may not fit at all into another one. This is a version of the 'Peter principle', which holds that a person is promoted to their level of incompetence. Some people thrive on dealing with breakdown, and derive much satisfaction from getting things put right; others favour experimentation and investigation and would be best in the task culture of R & D. It is important that these different cultures and activities are integrated, and this may be achieved by appointing a co-ordinator, with expert power, with interpersonal skills, and appropriate status in the organization who is given the information needed in his/her position in order to take the necessary decisions. It has been found that high levels of differentiation between departments, in terms of time horizons, orientations to the market, interpersonal styles and formality of organizational structure are indicative of the "high performers" amongst organizations. Lawrence and Lorsche, 1967. Morse and Lorsche 1970 found very different styles of management in a successful laboratory compared with a successful manufacturing plant. Joan Woodward found that the more effective organizations were the ones whose structure seemed appropriate to the technology. Peters and Waterman, with their studies of 'excellent' companies, mentioned earlier, showed that a mixture of cultures was effective. 5 Example: safety culture SC Safety culture has been ‘blamed’ for a number of incidents, including Deep Water Horizon, Exxon Valdise, the failure relating to the MoX pellets of plutonium from BNFL to Japan and even Fukushima. So it is important to understand what SC comprises. The number of factors within SC has been shown in investigations to be somewhere between 3 and 17. The most commonly occurring within these researches include: Risk awareness and perception Risk taking, risk avoidance, and loss avoidance behaviours Perceived personal responsibility and involvement Perceived management responsibility Management style communication Trust, Loyalty and Commitment Job satisfaction Safety standards and goals And all of these have been shown to relate to incidents as well as accidents as in the safety pyramid. Thus Sc is an important predictor of safety performance and is responsible for higher or lower levels of injuries, near misses, etc. Latent conditions and active failures refer to the underlying organizational context and then other active, behavioural problems on top of that. SC can even be used to predict worker injury involvement and can determine what behaviours are acceptable or will be rewarded. A safe culture is informed, just, flexible, based on problem-solving rather than blame, and an essential element is reporting. 13 ©copyright Dr Joan Harvey Successes may be attributed to ‘safety intelligence’, which involves certain types of leadership and management skills related to the above list but also including empathy with the shop floor. How many safety cultures are there? Examples where there are at least two •Airplane cockpit crew and cabin crew •Management and employees •Management and technical/professional •Tribal or ethnic groupings •Men and women •Retail or Manufacturing or Chemical/petroleum? Is safety culture conceptually different at different job grades, e.g. management or employee? –Almost certainly yes, to some degree Is it conceptually similar in different organizations, e.g. would we expect it to have the same dimensions in a retail outlet as in a chemical plant? –Often no, as people become sensitised to their own work environment SC links with HR include •Performance management •Knowledge management •Selection issues •Training issues •Employee relations •Motivation and reward •Blame culture and attributions •Stress and presenteeism •Job design issues •Work scheduling, e.g. shiftworking SC links with organizational policy include •Strategic decisions need to take safety implications into account. In both MoX and Piper Alpha the management strategic imperatives created both these problems •Use of agencies –Does one ensure that they have the same working conditions as one’s own employees •Use of subcontractors –Should one insist on the same SMS and HR conditions? SC and how employees feel •Trust is crucial •The damage of one ‘bad’ incident outdoes 10 or 20 good ones •Affect heuristic •Risk and ‘the other’ •Technocratic bias of many safety initiatives •Ideological or religious influences on behavour 6 Organizational Development OD- a Western technique with nothing to offer other cultures? OD has been defined as "a long-range effort to improve an organization's problem-solving and renewal processes, particularly through a more effective and collaborative management of organizational culture...with the assistance of a change agent, or catalyst, and the use of the theory and technology of applied behavioural science". OD is very much orientated to Western values and ideals, which, amongst other things, aim for employees to accept "constructive criticism". This phrase has been mentioned increasingly in literature on management development and it is hard for many people to accept. In Western organizations, the notion of confronting problems head on, being assertive about the work of colleagues, admitting that you need training and development seems to be an increasingly mentioned part of the way we are encouraging managers to behave. If people have value systems that seek to emphasise pride in work, relationships with colleagues and family, status and position, but where the values treat poor performance as being shameful rather than something to be admitted to and remedied, then OD will be totally inappropriate. Instead, management development would need to build upon those values, so that it could be achieved by reinforcing pride and self-esteem for good work and by learning new activities and new ways of doing things to gain status and position. Many organizations choose to focus on the development of their staff in order to improve efficiency and make changes for the 'better; self-development is often perceived to involve trusting the employee to take responsibility for their own actions, i.e. 14 ©copyright Dr Joan Harvey autonomy and responsibility . However, the organization may also often send signals which contradict that trust, autonomy and responsibility. An example here would be the introduction of tough disciplinary measures, indiscriminately applied, for absence from work OD has often been described as involving 'action research' and it centres around interpersonal behaviour, attitudes and values, as well as the more traditional aims and objectives. There is usually an emphasis on openness between colleagues, improved conflict resolution methods, more effective team management and the collaborative diagnosis and solution of problems. Collaboration implies not only trust, but shared expertise and a loss of the status that is associated with expertise and position. As a technique, OD favours bringing issues and emotions out into the open rather than 'brushing them under the carpet'; it tends to confront issues head on in order to resolve them; this will be intolerable to people who have pride in what they do and who are motivated to improve by new, positive training rather than the implied criticism that conflict and accusations bring. To use OD requires special help, usually a consultant in this kind of method. It seems to be the wrong methodology for much of Third World management and it is possible that it is also inappropriate for the newly emerging East European countries but it is important to know that it is a powerful technique for Western managers, although not necessarily popular with many of them when applied to them personally. OD would also have fundamental philosophical and conceptual problems if transferred to a Japanese culture, where the group is the focus of attention. New ideas are not developed unless one's work group has approved and adopted them; work is done by managers because it is needed rather than because they are told to do it; there is little reinforcement on an individual level; everyone dresses and behaves in a more equal way. Perhaps the whole idea of OD needs to be rethought if it is ever to be applicable across such different cultures as have been described. So, it can be seen that culture is a crucial aspect of an organization's functioning. This paper has considered differing types of culture and their appropriateness to organization, department and individual. It has also examined the effect of culture on measures of organizational success and has looked at some aspects of culture that differentiate between Western, Japanese and African concepts of culture. 15 ©copyright Dr Joan Harvey Chapter 3: International and cross-cultural issues 16 ©copyright Dr Joan Harvey Geert Hofstede's five factors power distance PDI - concerns the inequalities of power and how society, organizations or even families have different solutions. It may be concerned with the amount of power a manager has over his/her subordinates or the height of and number of levels in the organizational hierarchy. It is typified by how much fear subordinates have about expressing disagreement with managers uncertainty avoidance UAI- if this is high, the culture likes to control the future, and this may imply dogmatism, authoritarianism, and traditionalism; it is higher in the 'new democracies' e.g. Austria, Japan, Italy than in the 'old democracies' e.g. Great Britain, USA, Canada.. At an individual level, uncertainty avoidance would mean a preference for structure and well-defined work rather than flexibility and 'ambiguity' individualism IND- is the opposite of collectivism. When individualism is low, people expect more help from family, friends and organization and give them more commitment in exchange. Individualism is rather high in the 'Anglo-Saxon' countries USA, UK, Australia, whereas collectivism is high in Venezuela, Colombia, Pakistan and Japan. masculinity MAS - for individuals, this means being more quantitative and connected with ambition, the desire to achieve, to earn more, whereas its opposite, femininity, is more qualitative and concerned with interpersonal relationships, the environment and a sense of service. Japan, Germany, USA, UK and Australia are all more masculine whereas the Scandinavian countries are more feminine; this is reflected in the greater amount of social, safety and environmental legislation in the Scandinavian countries. long vs. short term orientation LTO. this is not simply whether we view things over longer or shorter time periods, but is more fundamental rooted in Confucianism. This dimension is more correctly called Confucian dynamism and long term orientation is viewed as being more concerned with harmony and therefore desirable. Country PD UAI MF IC LTO Ger 35 65 66 67 31 China 80 30 66 20 118 USA 40 46 62 91 29 Japan 54 92 95 46 80 UK 35 35 66 89 25 Finl 33 59 26 63 41 Austria 11 70 79 55 31 India 77 40 56 48 61 Hung 46 82 88 80 50 Denm 18 23 16 74 46 Croat 73 80 40 33 Czech 57 74 57 58 13 Slov 104 51 110 52 38 Poland 50 72 60 55 31 Max (min) 104 (11) 112 (8) 110 (5) 91 (6) 118 (0) Table: Main Hofstede dimensions comparing ImportNET and other countries The original work by Hofstede, published in 1983 was based on IBM and usable data were obtained for 40 of the original 50 countries and four dimensions were found. Only one country has changed significantly since then- South Africa- where original data were based on white managers only. Other countries may have changed but not to a great extent in terms of the dimensions although many have developed considerably economically since then. Some countries’ data have been added relatively recently, being those in Eastern Europe and some African countries. In the 1990s, the research by Hofstede with Bond identified a fifth dimension, being what is now called Long term-short term orientation, but this was really based on Confucian values, so reflects a wider set of values than simply time based one. The five Hofstede factors are now discussed in terms of their implications, using each dimension in turn. 17 ©copyright Dr Joan Harvey Figure1: Hofstede Cultural Dimensions for Europe, Asia, USA and World Average (Hofs-06) Figure 1 shows the average values of European and Asian countries as well as USA and the world average. Not surprisingly the value for Individualism (IDV) is significant high for USA and low for Asian countries. That means the people in USA are expected to look after him/herself and his/her immediate. Power- distance Low PDI: The types of values reflected here are those relating to beliefs that: inequality should be minimised, equal rights, the way to change a social system is to redistribute power, harmony between the powerful and the powerless is better than conflict, older people should be neither respected nor feared; people should be interdependent. Denmark and Austria most reflect these beliefs, but UK, Finland and Germany are also lower. High PDI: Hierarchy is important, and there should be order in inequality and people knowing their place; older people should be respected and feared, power holders are entitled to privileges, superiors and subordinates consider each other as being of different kinds. India, Croatia and China score highly on this scale out of the countries shown. PDI differences in SME interaction and communications SMEs in India and Denmark- we would find very different attitudes to authority and the 'managers' rights to manage'. So an engineer in an SME in India might need clearance and approval from a senior manager or may be less able to negotiate something on behalf of his/her company. Decisions could take longer to be approved in India than in Denmark or Austria, causing potential delays. Both sides need to understand that the relationship with authority will be different in the different countries. Uncertainty avoidance Low UAI: Lower levels of work stress, less anxiety. Emotional feelings suppressed. Willingness to take risks. Comfortable with ambiguity and chaos. Company loyalty is not a virtue. Managers selected on ability rather than seniority. Preference for smaller organizations. Optimism about employer's motives. Most people can be trusted. Can admit dissatisfaction with employer. Acceptance of foreigners as managers. Facial expressions more easily readable. If necessary, employees may break the rules. Individual decisions, authoritative management and competition among employees acceptable, people more likely to change jobs and employers. Favourable attitude to young people, smaller generation gap. Willing to take unknown risks. More trusting. Flexible in orientation, low resistance to change. Keen for advancement and promotion. Belief that one can influence one's own life. GB, Denmark, India, China lowest on this. High UAI: High levels of stress and anxiety, expressing emotions is normal, but not always easily read by others. Tendency to stay, value loyalty, managers selected for seniority. Critical attitudes toward young people and large generation gap. Less tolerant of diversity. Only known risks are taken. Inner urge to be busy. Conservatism, law and order, stick to the rules. Need for clarity and structure. Preference for larger organizations. Less trusting, need to be careful. Harmony with nature is appealing. Croatia, Austria and Hungary highest on the countries shown. UAI differences in SME interaction and communications For example, a company in China and one in Austria may disagree on the risks involved in a project; one member of one company may be happy with ambiguity in what is expected of them as they see that as giving them some 'freedom of 18 ©copyright Dr Joan Harvey manoeuvre' whereas the other wants to see the rules, procedures etc. all laid out and then they should stick to them. There will be different levels of trust. The ambiguity which is happily tolerated by someone from, say GB, may cause stress in someone from one of the two high UAI countries. Masculinity/Femininity High M: More masculine countries tend to be more competitive. Challenge and recognition important. Ego orientation. Values of women very different to those of men. Work central to one's life space- live in order to work. Men should be tough and take care of performance and women should be tender and take care of relationships. Money and things important. Men should be assertive and ambitious. Stress is on what you do. Belief in individual decisions. Employer may invade employees private lives. Promotion by protection. Achievement in terms of ego boosting, money and recognition. Austria and Hungary highest M, and GB, Germany and China above mid point on scale. High F: Relationship orientation. Quality of life and people are important. Modesty preferable to assertion and ambition. Minimal social and emotional role differences between the genders. Small and slow are preferable to big and fast. Private life protected from employer. Promotion by merit. Achievement in terms of quality of contacts and interaction and the environment. Finland and Denmark score high on F, as does Croatia to a lesser extent. M/F differences in SME interaction and communications Examples include the likely greater numbers of women engineers and designers in Finland and Denmark. than in most other countries. There may be problems in accepting women's views as valid in high M countries. Different emphases on performance orientation in projects. May be less easy to contact employees on Finland and Denmark out of company hours( remember time differences here) People more likely to be available at all hours in higher M countries. More likely to see assertive, dominant behaviour amongst higher M countries, even where all men involved so they might vie for achievement and recognition. Individualism/Collectivism High I: Typically very high are GB, USA and Australia, Denmark lower but still high I. Importance of employees personal lives, freedom and challenge in jobs. Qualification for jobs in terms of performance of previous tasks. Identity based on the individual. Self-started activities. Individual initiative, achievement and leadership ideal. Tend to be emotionally independent. Calculative involvement. May change organizations more often. Earnings more important than interesting work. May be more hedonistic. Guilt (rather than shame). High C: 'Extended' families protect in exchange for loyalty. Identity based in social system, emphasis on belonging. Shame (rather than guilt). Values standards differ for in-group as opposed to out-group. Greater emotional dependence on institution or organization. Greater importance attached to what is provided, e.g. physical working conditions. Qualifications for job based on years of education and experience. Moral involvement with company. Interesting work as important as earnings. Knowing the right people is important. Duty, expertness and prestige important as life goals. Large company may be more attractive than small local one. China highest C of all countries. I/C differences in SME interaction and communications In a project, high I much more likely to work individually, take less notice of what others think, use their personal initiative more. High C countries much more likely to discuss issues with the group or company, not want to take big decisions without discussion, will take group responsibility rather than individual credit or blame. Seniority in terms of age, experience and education will determine whether issues are approved or not, and consultation times may make things slower than UK/US people would wish. The role of networking within and between high C organizations is important and must not be underestimated, as it can kill potential projects. High I people may be more likely to be impatient with some of these issues. High individualism may be interpreted as arrogance, hedonistic, bombastic and selfish. High collectivism may be interpreted as deliberately slowing proceedings down, being too cautious and not willing to commit to things. Long term/short term orientation Long term: China scores very highly on long term orientation, although in some places this may be partly being eroded as Chinese businesses look towards making money more than in the past. Nevertheless the primary orientation of Chinese people is not so much to short-term gain as it would be in European countries. Some of the values associated with the long term orientation as define here include: persistence and perseverance, thrift, having a sense of shame. Ordering relationships by status and observing that order. Also personal adaptability, steadiness, protecting your "face" is common although may be viewed as a weakness. Respect for tradition but prepared to adapt to new circumstances . Reciprocation of greetings, favours and gifts- but need acre not to over overspend. Most important events will occur in future. Short term: This is associated with expectations of quick results, not feeling shame, knowing how to spend rather than being thrifty. Leisure time is important. Status is not an issue in relationships. Tending to focus on the past or on the present. Tendency to save only in smaller amounts; investment preferred in mutual funds rather than real estate. LT-ST differences in SME interaction and communications People will view businesses differently in terms of the long and short term future of the business and will look for quick results for ST organizations and anything up to 20 years into the future for LT organizations. Or, if a problem occurs in a project, there will be differences in levels of persistence to solve it. Another example would be spending money or taking more thrifty options. There will be different pressures to show results. An example might be a project involving the UK and China, where a time scale was agreed, but this was actually nominated by the British, and the Chinese, not wanting to offend, acquiesced. Then maybe some slippage, through no particular person's fault, and the British might blame the Chinese for taking things too slowly, and the Chinese might blame the British but would 19 ©copyright Dr Joan Harvey not say so as it would offend, so there would be tension and mistrust in both directions, which may extend to an unwillingness next time to commit to a project, but for nearly opposite reasons. Within the project, assurances might have been given about doing things "as a matter of priority" or "as soon as possible" or "hopefully by the end of next week", all of which carry some ambiguity which means the phrases not only need to be interpreted in terms of what they might actually mean (e.g. what does 'hopefully' imply?) but what in addition might beliefs about each other add to the interpretation of when thing would be done. So interpretation about when a job would be finished is a combination of the information from the original agreement (which might mean different interpretations), speed of working and prioritisation, values and expectations about whether the job should be done quickly or more slowly but accurately, literal interpretations of phrases, implied meanings of phrases, etc. Other dimensions in addition to those of Hofstede Time perception This includes the concept from Trompenaars that relates to sequential versus parallel time, which is similar conceptually to the almost sanctified (time is money) linear time (monochronic time) which is so characteristic of the US, Switzerland and Germany to the concept of multi-active time which characterises the Southern Europeans (Lewi-06). Multi-active time (polychronic time) means doing as many things as possible at the same time and being less interested in schedules and punctuality, and this may offend the sense of order, tidiness and planning of the Swiss, Germans and Americans. In Eastern cultures, time may be viewed cyclically, where humans adapt to time; time is not viewed linearly or event-relationship related, but the days, weeks, season etc come and go and continue to do so in cycles. So there is not necessarily any need for quick decisions- the past constitutes the contextual background to the present, and the thinking, as per the long-term orientation, is well into the future. The same risks, problems, opportunities and issues may re-present themselves in the next cycle. The Chinese and Japanese and others from nearby countries may ‘circle round’ a problem and take time for reflection. However the Chinese like punctuality and may even arrive early, and appreciate the importance of time, but time serves other purposes, such as attaining greater closeness, common trust and intent (Lewi-06). Linear time may be partly predictable, as it can be considered metaphorically as a (straight) road along which we proceed. Cyclical time may be more curved and observers of this are less disciplined in their planning for the future. Attitudes to working late also vary across cultures- for example, the British see this as a sign of loyalty or enthusiasm, whereas the Scandinavians might see it as inefficient or incompetent; in Japan it would be seen as a necessary obligation to the organization and to the manager if it was required and would be done without question, as happens in many Japanese companies throughout the world (NeMi-92). Time perceptions in relation to action once decisions are taken may also vary- for example Germans might want work to commence as soon as a decision to implement was taken. Universalism- particularism This refers to a general belief that what is good and true can be identified and applied everywhere (universalism). But if society believes that unique circumstances and relationships prevail, then that society is based on particularism. Universalists are more likely to rely on contracts and legal strategies whereas particularists rely more on trust and relationships. Western societies are more likely to be universalist, whereas Eastern societies are more likely to be particularists. Expression of emotion This relates to how societies express emotions. In affective societies, such as Mexico and the Netherlands, expressing emotions openly is natural, whereas in neutral cultures, such as Japan and China, emotions are held under control. This dimension relates in part to the emotional component of UAI in the Hofstede factors. Specific-diffuse relationships This relates to the degree to which people feel comfortable with dealing with other people. In a specific-relationship society, people prefer to keep their private lives separate and closely guarded; typically, this describes the US and UK. In diffuse- relationship cultures, such as Germany, individuals have large private and relatively small public lives. Because of this, Germans are likely to maintain formal relationships and see Americans or Britons as intrusive and disrespectful when they ask questions like ‘Where did you go to school?’. But in contrast, Americans are likely to see the Germans as reserved and difficult to get to know. Achieving versus ascribing status This describes how status and power are determined. Status can be achieved by either an individual position or identity. In achievement orientated societies such as Austria or the US, workers and managers are evaluated by how well they perform the tasks associated with their jobs, and people are judged by how well they compare with others in similar positions. In ascribing societies, such as China or Venezuela, status is associated with such variables as age, gender, qualifications, or the importance of thee task or project. 20 ©copyright Dr Joan Harvey

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