An organization does not exist in a vacuum. Any group of people-a business, hospital, charitable group, or government agency-is in part shaped by the society in which it was created. The values, ways of thinking, and customs of a culture, among other factors, are reflected in the structure and behavior of organizations within that culture. For example, compare the feistiness of the U.S. Congress to the rubber-stamp behavior of the Soviet legislature before Gorbachev’s reforms. The cultural environment of an organization is the economic, social, and political context established by the larger culture in which the organization resides.
All three of these facets of culture are important to an organization’s shape and functioning. The economic aspect of the cultural environment embraces such issues as how work is done, to whom the fruits of labor belong, and the relationship of the government to economic entities. In addition to demands for radical political changes, the upheaval that began in late 1989 in Eastern Europe included a kernel of economic revolution as well, as citizens of these formerly rigid communist countries campaigned, not just for democratic rights, but also for a market economy. Although the situation is much too volatile to permit predictions of what will occur, it is likely that organizations in Eastern Europe-or Western organizations attempting to enter these new markets-will have to adapt to new environmental conditions.
The social facet of culture embraces a range of fundamental influences on organizational life. Norms for human interaction, control, the value placed on material versus spiritual life, the way language is used to express ideas and relationships, and the symbols that resonate in the minds of people in the culture, all are manifested in various ways-obvious or hidden-in the organizations formed within that culture. Thus the value placed in Japan on community and teamwork has found expression in such features of Japanese business as lifetime employment and work teams. And the opening of the first McDonald’s in Moscow in 1990 revealed a fascinating glimpse of differences in social culture. Managers found that they had to teach the Russian patrons to form multiple lines for service; standing in just one line was habitual for Muscovites accustomed to stores barren of goods.
The political facet of culture is the relationship of individuals to the state and includes legal and political arrangements for maintaining social order. Political institutions take a variety of forms, as do the assumptions underlying them. Management’s role in an organization is shaped by the form government takes. Government places constraints on certain industries in the United States-utilities, for instance, are heavily regulated by government agencies. The political form determines such things as the rights of individuals and organizations to hold property or engage in contracts and the availability of appeal mechanisms to redress grievances as well.
To understand the differences between domestic and international management, it is necessary to understand the major ways that cultures vary. Anthropologists see culture as patterns, explicit and implicit, of and for behavior acquired and transmitted by symbols, constituting the distinct achievement of human groups, including their embodiment in artifacts; the essential core of culture consists of traditional (i.e., historically derived and selected) ideas and especially their attached values; culture systems may, on the one hand, be considered as products of action, on the other as conditioning elements of future action.
Culture is shared by most if not all members of a group, it is passed from older to younger members, and it shapes behavior and structures one’s perception of the world. Six basic dimensions, each answering a fundamental question, describe the cultural orientation of a society:
1. Who am I? Or how do I see myself? This is the good-evil dimension.
2. How do I see the world? Am I dominant over my environment, in harmony with it, or subjugated by it?
3. How do I relate to other people? Am I an individualist? Do I come from a group-oriented society in which the welfare of the group predominates? Am I from a hierarchical group society, in which members of the group come from across generations?
4. What do I do? Do I value action? Do I value being in situations in which people, ideas, and events flow spontaneously? Or am I from a controlled society in which desires are restrained by detachment from objects in order to let each person develop as an integrated whole?
5. How do I use time? Is my culture oriented to the past, the present, or the future?
6. How do I use physical space? Is a conference room, an office, or a building viewed as private or public space?
The answers to these questions determine appropriate behaviors across cultures. For example, Americans hold important meetings behind closed doors and give important people private offices. In Japan, by contrast, bosses often sit amidst their employees, and no partitions divide working areas.
Cultural differences shape the behaviors of the people in those cultures. Management literature is informed primarily by studies done in the United States (or in North America) using primarily American workers, but a growing body of research either studies people and their organizations in other cultures (Japan being a recent favorite example) or compares the behaviors of people and organizations across cultures. Most organizational re-searchers who study groups across nationalities ignore definitional issues and equate the national culture with the existence of a nation-state. This approach misses important issues, however. The most common definition of culture that does not simply rely on identifying a nation-state concentrates on cultural content or shared values and the symbolic representation of shared meanings.
Using this definition, one can distinguish two main types of national cultures: the homogeneous and the heterogeneous. A homogeneous societal culture is one in which the shared meanings are similar and little variation in beliefs exists; that is, the culture has one dominant way of thinking and acting. In homogeneous societies the degree of consensus is strong. Examples are China, Japan, and Saudi Arabia. A heterogeneous societal culture is one in which numerous population groups have specific and distinct values and understandings. In a heterogeneous society many sets of shared meanings make up the society. In a heterogeneous society, multiple cultures exist along with a dominant culture, the dominant set of values is not regarded as the only acceptable set of norms. Examples of heterogeneous nations are the United States, Canada, and Switzerland. (Bear in mind that even homogeneous societies include some subcultures that embrace values or norms deviant from the dominant culture; no society is so monolithic as to include one culture only.)
In homogeneous societies, organizations are likely to represent the societal culture; in heterogeneous cultures the diverse subcultures found in the work force will each shape the organizational culture, creating the possibility of a lack of congruence between the organizational culture and the dominant societal culture. In this case, a number of distinct corporate cultures will exist. Beliefs and values in the societal culture find expression (or not, in the case of heterogeneous cultures) in beliefs and values of the organization. These, in turn, influence organizational functioning. In the homogeneous society, organizational functioning will fit with the societal culture as well as with the organizational culture. In the heterogeneous society, organizational functioning will reflect fit with the organizational culture, but there may be a gap between that culture and the dominant culture in the society.
Structural features of organizations may be similar across cultures, yet national differences among people are not diminished when they work in the same organization. One study found striking cultural differences among people working in a single multinational corporation. More pronounced cultural differences were found among employees of different nationalities working in the same multinational organization than among employees working for different organizations in their native lands. Managers working in other countries, then, must be aware of the cultural traits of their workers and perhaps try to adapt the corporate culture to the workers’ characteristics.