Summary Comparative Management

Introduction to the approaches to comparative international management Universalistic theories = claim that the phenomena of management and organization are subject to the same universal ‘laws’ everywhere in the world. It tends to predict that cross-national differences in management and organization will disappear in the future. Driving force is globalization. (e. G. Interagency theory) Particularistic theories = posit that organization and management in different countries can differ fundamentally, and that different explanations are necessary for different countries. It tends to predict hat cross-national differences in management and organization will persist. (e. G. Cultural and institutional approaches) Contingency theory (Hicks:) we can only start to attribute features to culture when we have made sure that relations between variables, are stable between cultures.

Structural contingency theory = given similar circumstances, the Structure Of an organization (= the basic patterns of control, coordination and communication), can be expected to be very much the same wherever it is located. Organizations must structure in responses to a series of demands or ontogenesis, posed by the scale/size of the operation, the technology employed and the environment within which operations take place.

Hierarchy/mechanistic Routine operations Narrow and specialized tasks Decision-making is centralized and detailed Hierarchy: steep, many layers Precise work descriptions and procedures Stable environment Mass production Size: large Organic Situations of high task uncertainty unstable environment Innovation Single product and process production Size: small(re) Broad and enriched tasks Indicative work description and results Decision-making is decentralized

Hierarchy: flat, few layers Strengths contingency theory: Straightforward Highly standardized methodology Multivariate analysis Weaknesses contingency theory: It has never provided an adequate explanation why the variables size, technology and structural features of an organization have a correlation It only elucidates properties of formal structure and neglects information structures: level of abstraction and generality is too high Seems to suffer from the fact that is evolved from western traditions of rational design of organizations and from research and organizational populations in mostly

Anglo-American institutional settings: ill-considered adoption of foreign ideas. Contingencies that influence the structure: environment, technology and size Institutional environment = the society’s distinctive set of highly established and culturally bound action patterns and expectations Cultural approach explains organizational variance between nations solely by cultural aspects and do not complement research by inquiry into the influence of institutional environment Mimic/linseed perspective = strive to describe a particular culture in its own terms.

Describe thoughts and actions primarily in terms of the sectors’ self-under-standing terms that are often culturally and historically bound. It is an interconnected working whole or system. Methods that are typically used are observations recorded in a rich qualitative form that avoids imposition Of the researchers’ Constructs (long-standing, wide-ranging observation of one or a few settings). Ethic/Outside perspective = attempts to describe differences across cultures in terms of a general, external standard.

Describe phenomena in constructs that apply across cultures. It is likely to isolate particular components of culture, and to state hypotheses about their extinct antecedents and consequences. Methods that are focused on are external, measurable features that can be assessed by parallel procedures at different cultural sites. Institutional approaches = incorporates cultures in the theoretical idea, but lacks the analytical tools to address the concept of culture in a satisfactory way.

They focus on comparisons that highlight differences that cannot be attributed to different goals, contexts, environments or strategies of enterprises. Their interest is focused on differences between organizations that cannot be attributed to common explanatory variables in organization theory’. They focus on wider norms and standards supported or enforced by institutional machineries or less daunting interested networks.

Firms can perform some types of activity that allow them to produce some kinds of goods more efficiently than others because of the institutional support they receive for those activities; the institutions relevant to these activities are not distributed evenly across nations. 2 major ideal types: Liberal market/Anglo-Saxon market -? a product- market strategy Business organization and coordination: weak Relations between institutions and actors: arm’s lengths; short-term; low trust

Financial institutions: market Education and training system for lower-level workers: ineffective Unions: weak Career patterns of managers: between firms Labor market: flexible; deregulated Coordinated market economy Business organization and coordination: strong and well organized; at the industry (north Europe/Germany)/at the group level (Japan) Relations between institutions and actors: long term; high trust Financial institutions: banks and market (north Europe/Germany) / banks (Japan) Education and training system for lower-level workers: effective Unions: important role Career patterns of managers: within firms

Labor market: regulated Coordinated market economy has 2 distinct sub-branches: Industry-coordinated (or Northern European) market economies – primary locus for coordination of activities is between companies with respect to technology transfer, initial training, industrial relations, and so on, is at the industry level.

Across industries coordination usually takes place via industry bodies, rather than individual firms Group-coordinated market economies (Japan) – primary locus of inter-company coordination takes place within across-industry groupings or large companies, to which the great majority or ere large companies belong, including companies from each major industry. Globalization = the interpenetration of the global and the local 4 possible scenarios of globalization 1 .

Convergence towards the Anglo-American inalienable market system 2. Greater specialization of national models in accordance with domestic institutional and cultural characteristics – implies that, under pressure of globalization and integration, the ‘domestic’ will adapt by specializing more vigorously in what it does best a. Greater specialization in national industrial profiles b. Development of greater societal specificity .

Incremental adoption of the domestic institutional context in a largely path- dependent manner 4. Habitation with change in path-deviant manner Chapter 1 : The societal environment and economic development Culture = an historically transmitted pattern of meanings embodied in symbols, a system of inherited conceptions expressed in symbolic forms by means of which men communicate, perpetuate, and develop their own knowledge about and attitudes toward level.

Including element likes meanings, values, and religion or ideology. Value = a broad tendency to prefer certain sates of affairs over there 2 vies on the relationship between economy and culture 1 . Economist’s point of view – they argue that cultural differences may cause differences in economic growth a. Washington Consensus = introduction a free-market system in poor and less-developed countries, by taking away all kinds of obstacles, which are mostly created by their government. . Interest in culture should be linked to the process of increased internationalization or globalization. Globalization implies a reduction in the effectiveness of traditional economic policy instruments, because there are leakage effects in a globalizes world economy. However, it is not only policy-makers that have to take the effect of globalization forces into account: multinational firms are affected too CLC trading with foreign countries is no longer unique. C.

The Weber thesis – Protestantism promoted the rise of modern industrial capitalism. An important element was the doctrine of predestination in Calvinist Protestantism. 3 historical facts that are related to the Protestant faith and that have economic consequences: I. Emphasis placed by Protestantism on instruction and literacy for boys and girls. Good Protestants were expected to read the Bible themselves, whereas Catholics were dedicated, but did not have to read. The result was increased literacy among Protestants. Ii.

The importance Protestants accorded to time. The making and buying of clocks and watching was much more common in the LIKE and the northern part of the Netherlands, than in Catholic countries and regions iii. The Protestant faith resulted in a significant reduction of holy days on which people were not expected to work, thus increasing productivity d. Social capital = those features of social organizations, such as norms, trust, and networks that can improve the efficiency of society by facilitating coordinated actions.

Regional and national differences in membership (=degree to which people are embedded and active in all types of clubs and associations) of these kinds of associations are hard to relate to differences in welfare, nevertheless, a dense neuron of associational activity in a country or region is an indication of the level of ‘spiciness’ of society, and provides some indication of whether a society is geared towards opportunistic behavior or horizontal relations based on mutual trust. I. Trust = one of the most important dimensions of social capital.

It is a social mechanism that reduces implement and enables individuals to deal with the complexities and contingencies of modern life, it can be seen as a central to the construction of social order. It can reduce the need to set pup institutional and organizational mechanisms in a society to overcome principle-agent problems. It refers to the confidence that a partner will not exploit the vulnerabilities of the other. Two levels: 1. Micro level -? based on the emotional bond between individuals, is more characteristics of primary and small-group relationships. It is more personalized and therefore yields ‘thick’ trust 2.

Macro level – involves more abstract relationships where trust is related to the functioning of bureaucratic systems (e. G. Legal, political and economic). Macro sources of trust apply apart from any specific exchange relationship, arising from the institutional environment of laws, norms, and standards. E. Institutions are important for the incentive structure of an economy. It is generally assumed that efficiently functioning institutions are important to the effective functioning of the market economy and process of economic development. The differences in institutions result in differences in the process of trust building.

If the majority of the people in less trust-based society are included to follow the rules there is a social pressure on individuals to do so as well. This yields 2 types of societies: I. Societies in which opportunistic behavior is the default ii. Societies where people are inclined to invest in relationship that are based on reciprocity To test whether measures of institutions and the trust measure of social capital related factor analysis can be used iii. Factor analysis = a method used to reduce the number of variables or to achieve better measurement of a certain theoretical construct.

To analyze the relationship between a large number of variables and to explain these variables in terms of their common underlying factors. 2 methods: 1 . Oblique rotations – allow correlated factors instead of maintaining independence between rotated factors 2. Orthogonal rotations – no correlation between factors 2. The sociologist’s stance – core question is where cultural differences come from. It is argued that one of the most important factors driving cultural differences is the level of economic development.

The shift from industrial to service economies goes together with a shift in value priorities from an emphasis on economic and physical security towards an increasing emphasis on subjective well-being and quality life. A. Installer’s thesis – economic development has systematic and, to some extent, predictable cultural and political consequences. The probability is high that certain changes will occur as societies develop economically, but it also depends on the specific cultural and historical context of the society in question.

The rise of industrial society is linked with coherent cultural shifts away from traditional value systems, and the rise of postindustrial society is linked with a shift away from absolute arms and values towards a syndrome of increasingly rational, tolerant, trusting post-industrial societies. Economic development tends to push societies in a common direction, but rather than converging, they seem to move on parallel trajectories shaped by their cultural heritages. Negligent identified 3 stage of cultural change: I.

Traditional 1 . Core societal project survival in a (mainly agrarian) economy 2. Individual value: traditional religious and communal norms 3. Authority system: traditional authority . Modern/longitudinal 1 . Core societal project: maximize economic growth 2. Individual value: achievement motivation . Authority system rational-legal authority Post modern Ill. . Core societal project: maximize subjective well-being 2. Individual value: post materialist and postmodern values 3.

Authority system: De-emphasis on both legal and religious authority In all of these stages 2 major processes occur from traditional n modern and from modern D post modern 4. Colonization = the decline of traditional religious beliefs in an institutionalized setting 5. Individuation 2 dimensions tap the basic cultural orientations of societies when com paring the worldviews of people of rich societies with those of low-income societies cross a wide range of political, social and religious norms and beliefs 6. Traditional dimension (rational is the opposite) a.

God is very important in respondent’s life b. Respondent has a strong sense of national pride c. Respondent favors more respect for authority d. Abortion is never justifiable e. It is more important for a child to learn obedience and religious faith than independence and communication 7. Survival dimension (self-expression is the opposite) a. Respondent gives priority to economic and physical security over self- expression and quality of life b. Respondent describes him or herself as not very happy c. Respondent has not signed and will not sign a petition d.

Homosexuality is never justifiable e. Respondent feels on e has to be very careful in trusting people Chapter 2: National Cultures and Management Mimic approach = stressing the unique aspects. Emphasizes the need to understand social systems from the inside and through the definitions of their members. It can be characterized as ‘ideographic’. It focuses on meaning; contemporary anthropological research by necessity espouses different research methods. Researches study differences from within (often data collected are shallow, but reliable).

Mimic research has always had a tendency o focus on cultural groups that are not defined by national boundaries – to make valid comparisons research should be based either on representative sample or on more narrow, but carefully ‘matched’, samples. This approach is a comparative research, which will express itself in a focus on relations between variable within cultures, followed by comparison of the patterns found from culture to culture. Ethic approach stressing the comparable aspects. Attempts to establish general laws governing large numbers of examples, it looks at the variances and covariance between cultures.

It can be characterized as ‘monotheistic’. It aims to generalize across the boundaries of individual countries. For example factor analysis can be used and has a partiality for standardized instruments, with the quest for ‘equivalence’ in ethic research (often data collected are rich but less reliable). Ethic research concentrates on the more homogeneous societies, avoiding this problem, but posing limits on the generalization of the framework -? to make valid comparisons research should be based either on representative sample or on more narrow, but carefully ‘matched’, samples.

This approach presupposes data on a greater number of cultures and tends to proceed from a study of ecological’ correlations. There are 2 areas of confusion in this analysis. First is ecological fallacy, which is committed when conclusions concerning individuals are drawn from high-level data. Second is reverse ecological fallacy, which implies that conclusions regarding cultures are drawn from individual-level data. Dimensions are developed to yield greater cultural understanding and to allow for cross-cultural comparisons.

Though these dimensions have boundaries. In which the mimic-perspective looks at a culture from within its boundaries, whereas an ethic perspective stands outside and compares two or more cultures. Typology = a way to illustrate differences between countries. It describes a number of ideal types, each of which is easy to imagine (e. G. Division of countries in 1st, 2nd and 3rd worlds). Though they are problematic in empirical research, as cases seldom correspond to 1 single ideal type. 3 Ethic approaches: Egger Hefted: 5 dimensions of work-related values. Basic societal problems underlie cultural value dimensions: Relationship to authority Conception of self, including the individual’s concept of masculinity and femininity Primary dilemmas or conflicts, and ways of dealing with them, including the control of aggression and the expression versus inhibition of affect 5 dimensions Power distance = describes the extent to which the less powerful members Of institutions and organizations within a country expect and accept that power is distributed unequally Low: e. G. Decentralization, low concentration of authority, flat organization pyramids High: e. . Centralization, high concentration of authority, tall organization pyramids Uncertainty avoidance = describes the extent to which the members of a culture feel threatened by uncertain or unknown situations Low: e. G. Lorraine for ambiguity in structure and procedures, and power of superiors depends on position and relationships, involvement of managers in strategy High: e. G. Highly formalized conception of management, power of superiors depends on control of uncertainties, and managers more involved in details Individualism vs..

Collectivism describes whether the ties between individuals are loose, with everyone being expected to look after himself or herself and his or her immediate family only (individualism) or whether people from birth onwards are integrated in strong, cohesive in-groups, which throughout people’s bedtime continue to protect hem in exchange for unquestioning loyalty (collectivism) Individual: e. G. Employer-employee relationship is a business deal in a labor-market, and employees perform best as individuals Collectivist: e. . Employer-employee relationship is basically moral, like a family link and employee perform best in in-groups Masculinity vs.. Femininity = describes whether social gender roles are clearly distinct: men are supposed to be assertive, tough and focused on material success; women are supposed to be more modest, tender, and concerned with the quality of life femininity), or whether social gender roles overlap; both men and women are supposed to be modest, tender, and concerned with the quality Of life.

Masculine: e. G. Mangers hold ambitious career aspirations, and managers expected to be decisive, firm, assertive, aggressive, competitive, just Feminine: e. G. Managers hold modest career aspiration, and managers expected to use intuition, deal with feelings and seek consensus Long-term vs.. Horn-term orientation related to the fostering of virtues oriented towards future rewards in particular perseverance and thrift versus the steering of virtues related to the past and the present, in particular respect for tradition, preservation of ‘face’, and fulfilling social obligations Long-term: in business: building relationships and market position, vertical coordination, horizontal coordination, control and adeptness’s, people should live more equally Short-term: in business, short-term results: the bottom line, family and business sphere separated, meritocracy: economic and social life to be ordered by abilities Critique on 5 dimensions Issue of the adequacy of the sample Inherent limitations of the use of the survey method in identifying heartsickness of cultures: low content validity of the survey instrument The suitability of the items used to establish the dimensions of cultures: lack of face validity The question of whether national culture may indeed by expected to exist -? that is, whether the country is an appropriate level Of analysis for cultures The applicability of Hypotheses findings to the present situation: cultures change Slalom Schwartz: three bipolar dimensions of motivational values Embeddings vs.. Autonomy Embedded cultures = people are viewed as entities embedded in the collectivity who find meaning in life largely through social relationships. Important values: social order, respect for tradition, security and wisdom Autonomous cultures = people are viewed as autonomous, bounded entities who find meaning in their MM,’n unique ensues and who are encourages to express their preferences, feeling and motives.

Two types: Intellectual autonomy = encourages individuals to pursue their own ideas and intellectual directions independently Affective autonomy encourages individuals to pursue actively positive experiences for themselves Hierarchy vs.. Egalitarianism Hierarchical cultures = the unequal distribution of power, roles and resources s seen as legitimate. Including values such as social power, authority, humility and wealth Egalitarianism cultures seek to induce people to recognize one another as moral equals who share basic interests as human beings. Emphasizing transcendence of selfish interest in favor of voluntary behavior that promotes the welfare of other. Including values such as equality, social justice, responsibility and honesty. Mastery vs.. Armory Mastery-orientated cultures = en courage active self-assertion in order to master, change and exploit the natural and social environment to attain personal or group goals. Important values: ambition, success daring and competence Harmony-oriented cultures accept the world as it is, trying to comprehend and fit in rather than to change or exploit. Important values: unity with nature, protecting the environment and world peace. Schwartz work has a higher face validity of the items used to operational, and the measurement characteristics of scale than the dimensions than Hefted. Though the broader items used, may limit the applicability of Schwartz framework in the field of comparative international management.

Fond Trampers: cultural dilemmas – 6 bipolar dimensions/dilemmas Universalism vs.. Particulars = concerns ‘rules’ in contrast to ‘relationships’ as the principal determinants of interpersonal behavior. Individualism vs.. Communitarian’s = individualism-collectivism of Hefted Specificity vs.. Diffuseness highlights the differences between cultures that analyze phenomenon into specifics, and cultures that integrated and configure such details into diffused patterns, relationships and wider contexts Achieved status vs.. Ascribed status = status in accorded on the basis of achievement. Ascription cultures are less individual and more collective Inner-directed vs.. Term-directed orientation -? distinguishes between cultures in which action is guided by inner-directed judgments, decisions and commitments, and cultures in which action is guided by signals, demands and trends in the outside world. At stake is whether virtue and right direction is located within us or outside us. Sequential vs.. Synchronous time = different attitudes towards time (past, present and future) are reflected by the contrast between notions of time as linear and ‘sequential’, and notions of time as circular and ‘synchronicity’. Such differences affect how we coordinate, plan and organize. Sequential = focus is rational efficiency, getting things done in the shortest possible sequence of passing time Synchronicity = allow parallel activities and is less orientated towards functionality, focus is more on effectiveness. (Affective vs.. Auteur concerned the extent to which emotions or feelings may be expressed in interpersonal communication) Cultural clusters West-European: high importance of egalitarianism, lower power distance and high importance of intellectual autonomy and individualism, and a low importance of hierarchy and embedded news Eastern Europe = shared ultras that emphasize harmony or a high uncertainty avoidance and high embeddings/collectivism, also a low level of masculinity and individualism English speaking = high level of masculinity, low level of uncertainty avoidance, high level of individualism and low level of collectivism African countries = low level of individualism, high level of power distances, little importance on affective autonomy and harmony, and very little importance on intellectual autonomy and egalitarianism East Asia = little emphasis to egalitarianism and a high level of power distance, low level of individualism Mimic approach D Philippe delineate: the logics of culture. He has critique on Hypotheses work: in Hypotheses power distance dimension the notion of power and hierarchy are conflated, they are by not always the same.

The existence Of large symbolic distance among the various levels of the hierarchy does not in any way mean that the balance of power favors the upper levels of the hierarchy He tried to comprehend the meaning attributed to behavior by local actors, in his view this leads to a more certain and precise understanding of the societies under investigation even if it does not give the name impression of objectivity Negotiation process = the best alternative to negotiated agreement. There are 2 possibilities. Either there is an overlap between the parties ‘zone of acceptance’, or there is no overlap. Each negotiation process takes place within a particular social situation and always has an element of unpredictability.

Cultural influences work out on the social situation in which the negotiations takes place; the way In which this social situations influences the perceptions, judgments, motives goals, and so on, of the negotiators; directly on these perceptions, and so on; and on the way in which these receptions and so on influence the behavior of the negotiators. Culture may mediate the social situation on the negotiator. It influences directly the perceptions, judgments, motivations, goals, and so on, of negotiators. Culture may also mediate the relationship between a negotiator’s psychic state and his or her behavior in the negotiation.