Management Theories and Philosophies - Literature review Example

Management Theories and Philosophies Table of Contents Table of Contents 2 Introduction 3 Levels of Culture 3 Influence of Culture on Organizational Practice 3 Tools for Culture Change 4 Hofstede Contribution 4 Hofstede: 5 Dimensions of Culture 5 Argument in favour of Hofstede Model 7 Criticism of Hofstede Work 8 Importance of Hofstede Work for Organization 9 Critical Assessment 9 Conclusion 9 Reference List 11 Introduction Culture is defined as a collection of assumptions that people simply acknowledge without question when they usually interact with one another. It is the collection of customs, beliefs, modes of thinking, and practices of different set of people that they share with one another when they work together in a group. At the observable level, culture of a team takes the shape of symbols, myths, ritual behaviour, sounds, artefacts, and sounds (Stacy, 1993). Culture is the unaffected system of the organization. It averts “wrong people” and “wrong thinking” from entering into the organization or company in the foremost place (Watkins, 2013). Culture plays an important role in an organization because it impacts most phases of the organizational life, for example how decisions or judgments are made, how incentive are distributed, who makes the decision, how the company responds towards its environment, and how employees are treated (Harrison and Stokes, 1992). The factors which affect the national culture are language, values, legal system, education, religion, and political system (Mullins, 2009). Geert Hofstede led the approach in the technical study of the cross-cultural organization. The Hofstede framework would be a very good way in order to identify the behaviour of people in negotiation (Witzel, 2003). The paper aims to present an overview of Hofstede’s contribution towards explaining the five dimensions of culture and also discusses both aspects of his argument. Levels of Culture As in general there are three levels of culture: first is national or regional culture, second is sub-culture, and third level is cultural universals. At regional level, culture reflects diverse dimensions of various customs/ different culture of nations. At national level, it reflects the dimension of custom of country as well as national characters. Culture exists in order to gratify the requirement of people through guidance, standard practices, and suggestions. Sub-culture is referred as a different cultural group which exists as a specific segment within more complex and larger society. It includes departmental and functional culture within the organization, organizational culture, family culture, and industrial culture. Cultural universals are learned patterns of behaviour that are usually shared by everyone collectively. It doesn’t matter where people reside on the earth; they share all the “human cultural” traits which include: using gender and age to categorize people; distinguishing between bad and good behaviour; and allotment of labour on the basis of sex (for example, women’s work verses men’s work); as well as having leadership roles in order to implement the decisions of community (Palomar, 2006). Influence of Culture on Organizational Practice Given the augmented globalization of the industrial organization and improved interdependencies among the countries, the requirement for better perceptive of the cultural influences upon organizational or managerial practice is very important. Culture plays a vital role towards influencing the leadership behaviours and the international organizational practices. Hofstede and Bond (1988) advocates that the differences in individualism and power distance decide the type of management most expected to be useful and disparities in improbability avoidance affect the motivation of people. Leadership perceptions are unique and are most probably influenced by the cultures as well as the other related variables, for example values, beliefs, and requirements, political as well as social cultural factors (Chhokar, Brodbeck and House, 2013). Greet Hofstede’s idea of national culture made a huge breakthrough towards understanding the link between cultural factors and organizational behaviours. The power distance concept of Hofstede is a vital dimension of nationwide culture that influences subcultures and leadership in organization. Understanding the perspective of diverse culture has become significant for employment and retention, and also for exploiting the contribution of employees. The influence of group culture on the companies has been discovered from various perspectives including organizational culture, management practice, and leadership (House et al, 2006). Tools for Culture Change There are three types of managerial tools which can be applied to help the leaders in developing, changing, and managing their culture in order to give better performance. These tools are: “employment and selection” which means hiring those employees who generally fit the culture; “training” develop ways that allow new employees to realize abilities, values, social knowledge, and probable behaviour to participate completely as a worker, and to make strong relationships among employees; “reward system” defines that the culture is informal reward structure of the organization. Culture and leadership together have considerable financial effects such as increased growth of net sales, more product referrals, amplified brand momentum, greater commitment of employees, as well as technology and agility adoption (Young and Jude, 2008). Apart from these three tools, Limb (1994) presented other six managerial tools for the culture change: transparency of purpose i.e. an apparent vision; presentation of strategy; an obtainable action plan; confidence building i.e. guiding and supporting people in order to act efficiently; leadership quality which means setting the strategy as well as leading in the course of implementation; and focus on the underlying principles which defines referring back towards the values that guide the management action. All these tools stress the function of leader in growing and also in sustaining culture (Middlewood and Lumby, 1998). Hofstede Contribution Greet Hofstede has led the approach in the study of the cross-cultural management. His investigation into the cultural dissimilarities within national subordinates of a sole company i.e. IBM, during 1960s & 1970s unlocked the door towards a better understanding of global differences in the psychology of job and of associations with main implication for the management of human resources and the organization theory (Witzel, 2003). The model of Hofstede for the cultural investigation has consequently undergone revisions and then other justifications for the cultural dissimilarities have been developed. However, the lasting achievement of Hofstede has been towards raising the significance of culture as a main issue when administering trans-nationally. One of the roles of Hofstede at IBM included carrying out of intercompany surveys between the numerous subsidiaries of corporation and employees around the globe. In the year 1968, he came out with the idea of doing an investigation which would measure the differences in traits and cultural values between subsidiaries (Witzel, 2003). After leaving IBM, he was still in contact with the company and therefore was able to carry out second survey in order to confirm as well as validate the outcomes of the initial one. The exceptional access to the company allowed him to compare the cultural ethics across the same corporation. At that time IBM was highly monolithic regarding its approach towards culture of company, and dissimilarities in managerial processes could be likely to be least or minimal. Hofstede established that the variations of cultural attitudes in the workplace revealed by the inspection could be categorized amongst four proportions, and then he develops the rating scale for all dimensions. The initial dimensions were power distance, avoidance of uncertainty, collectivism/individualism and feminity/masculinity (Witzel, 2003). Later on, Hofstede’s four dimensions are expanded into five dimensions which are power distance, avoidance of uncertainty, collectivism/individualism feminity/masculinity, and short-term/long-term work orientation (Black, 2003). Hofstede: 5 Dimensions of Culture Greet Hofstede has made a move towards the national culture in order to make interaction among countries. His framework has helped most of the researchers to recognize the behaviour of the people (Molina, 2005). The intercultural and international communication has developed into a subject of various research and studies. The significance of understanding the interactions and relations among people from various places has augmented from the time when the world has developed into a “small place”; communications, businesses, and the internet have made this world more dynamic. It is now feasible to have the information at similar time from most of the places, right in the telephone, television, or computer, although it is necessary to understand the implication of the actions and the words in every society. Hofstede is proficient in bringing the concept of interaction between organizational cultures and national cultures. In the year 1991, the statement concerning “national culture” is made by him: the patterns of feeling, acting, and thinking are recognized by him. These patterns are component of the differences of national culture, which are visible in the culture’s preferences of symbols, rituals, heroes, and values (Molina, 2005). His five aspects of culture are: power distance, avoidance of uncertainty, individualism verses collectivism, masculinity verses feminity, and long term verses short term work orientation (Nunez, Mahdi and Popma, 2007; Martineau, 2000). Power distance is the degree to which the associates of organization who are less powerful expect and accept that the power is unequally distributed. High power distance cultures generally have centralized authority; autocratic leadership; several hierarchical levels; paternalistic management approach; various supervisory staff; a hope of power differences and inequality; and acceptance that the power has its advantages (Pill, 2006). Low power distance involves: decentralized power and the responsibility of decision making; participative or consultative management style; small fraction of supervisory employees; flat organizational construction; rights consciousness; propensity toward egalitarianism; and lack of approval as well as questioning of power (Sandiego, n.d.). The United States of America, New Zealand, Norway, and Ireland represent low power distance culture. India, France, Brazil, Mexico, Singapore, and Indonesia represent societies with the high power distance (Aswathappa, 2010). Second level is avoidance of uncertainty which explains the level to which the members of society are capable to deal with the future uncertainty without experiencing excessive stress (Landy and Conte, 2007). The weak uncertainty avoidance is characterized by: flexibility; risk taking; tolerance of contradictory opinions and behaviours; organizations with few rules and comparatively low level of structure; and the promotions depends on merit. Strong uncertainty avoidance is characterized by: averting of risk; promotions is generally based on age or seniority; organizations with noticeably delineated structures, standardized procedures, various written rules; strong requirement for consensus; lack of patience for deviants; respect for power; and need for logicality or predictability therefore, planning is necessary (Sandiego, n.d.). The third level, individualism vs. collectivism explains that in the individual atmosphere, the individual and their privileges are more significant than groups to which they belong to (Gannon, 2001). Individualism level includes advance contractual relationship which generally depends on the theory of exchange, the employees calculate profit or loss prior to engaging in behaviour; focus on the self and loved ones; self-sufficiency and value independence keep self interest over collective interests acknowledge disagreement as a quality; emphasize fun, personal enjoyment, and pleasure more than the social norms; usually consider that their ideas are unique; and give priority to the horizontal relationship. United Kingdom (UK) and The United States of America (USA) are comparatively individualistic in nature (Gannon, 2001). In a collective atmosphere, people behave in accordance with the social norms such as: to maintain the social harmony between members of in-group; share resources as well as are ready to sacrifice their personal concern for group interests; consider suggestion of their act for wider group; favour definite in-groups such as friends and family; are concerned about the members of in-group and are hostile or uninterested towards the members of out-group; emphasize harmony and hierarchy within group; and control behaviour through the norms of group. The countries which represent collectivism are India, France and Japan. Fourth level of Hofstede model is masculinity vs. feminity. Masculinity signifies the overall trend of a culture in order to sustain the usual masculine orientation i.e. higher masculinity indicates that the societies business culture takes on customary masculine values, for example stress on earnings and advancement (Paul, 2008; Falkenreck, 2009). Though, within every culture, there generally remain gender dissimilarities in attitudes and values. The countries with high masculinity have the following values, beliefs, and norms: men are dominant and assertive; gender roles must be visibly distinguished; exaggerated maleness or machismo in men is considered good; men must be decisive; advancement, money, and success are important; occupation takes priority above other duties for example family. Men generally select jobs which are related with the long-term professions. Women select jobs which are related with short-term service i.e. before marriage. The feminity culture explains that both women and men are believed to be tender, modest, as well as concerned with their life quality; lay emphasis on non-materialistic phase of success. Japan is a good example of high masculine culture because there men take projects for more than a year in another countries or cities though their family stay at home (Cullen and Parboteeah, 2013). Fifth level is long term vs. short term work orientation is based on the philosophy of Confucius which indicates that the steadiness of society depends upon unequal relationships among people; family is considered as the example of all societal organizations; virtue with consideration to one’s jobs consists of acquiring education and skills, not paying more than needed, being patient, working hard and persevering (Johnson and Turner, 2010). Long-term work orientation reflects a future oriented and dynamic mentality; emphasizes thrift; give emphasis to persistence, maintains interrelatedness through kindliness to the social contacts; and positively related with the economic growth. Short-term work orientation reflects a comparatively tradition-oriented and static mentality; emphasizes stability; lays importance on personal steadiness; have respect for tradition; give emphasis to reciprocation of favours, gifts, and greetings; and negatively related with the economic growth (Martinelli and Taylor, 2003). Argument in favour of Hofstede Model Research of Hofstede is regarded as one of the mainly used sections of research by practitioners and scholars. Many researchers have the same opinion on the below mentioned points which strengthen the importance of study (Jones, 2007). Relevance: During the period of the delivery of Hofstede’s work there was slight work taking place on culture, and now many companies were entering the global arena and are also experiencing hurdles; they were howling out for convincing advice. The work of Hofstede met as well as exceeded this requirement for guidance. Intellectual attention was also turning in the direction of culture throughout this time, and he was regarded as a pioneer as well as pathfinder (Safi, 2010). Rigour: Hofstede’s research framework depends on the rigorous design along with coherent theory and systematic data set. This is what the marketplace and scholars has been requesting for. Though, many critics argued that the sampling was unevenly distributed and imperfect (Safi, 2010). Relative accuracy: In the bibliographical analysis of Sondergaard (1994), replication of the Hofstede’s research has been compared by Sondergaard. 61 imitations were analysed. Most of them confirmed the prediction of Hofstede’s work. Four of them harmonized in their entirety, whereas fifteen demonstrated partial confirmation. The only element of Hofstede contribution that cannot be logically confirmed was the “Individualism”, though Hofstede explained this subject by envisaging that the cultures will revolutionize over time (Safi, 2010). Criticism of Hofstede Work Criticised on the depth, breadth, and importance of his contribution into culture, the work of Hofstede was nothing short of highly controversial. Akin to a few of the great economist (such as Keynes, Philips, and Malthus) Hofstede is also not without his supporters and opponents. Many arguments are against the work of Hofstede, the discussion that follows attempt to capture a few of the pertinent issues are as under: Relevancy: Many researchers argued that a survey is not the suitable instrument for correctly measuring and determining the cultural disparity. Conducting survey is especially perceptible when the variable to be measured must be a value. Hofstede tackles this criticism by declaring that survey is one method, however not the merely method which was used (Jones, 2007). Cultural Homogeneity: This condemnation is possibly the most popular one. Hofstede’s work believes that the domestic residents are homogenous whole. Therefore, the analysis is confined by the nature of individual being measured; the results have a probability of arbitrariness. Hofstede also ignored the significance of community (Jones, 2007). National Divisions: Nation is not considered as the appropriate unit of investigation because cultures are not essentially bounded by the borders. Latest research has established that the culture is fragmented across national lines and groups. However, Hofstede mention that national individualities are the single method of identifying as well as measuring the cultural differences (Jones, 2007). One Company Approach: A study engrossed on single company cannot give information on whole cultural structure of a nation or country. Hofstede explained that he was not constructing an absolute evaluation, he was only measuring differences between the cultures and according to him this method of cross sectional investigation was appropriate (Jones, 2007). Out-dated: Some of the researchers have argued that Hofstede work is very old, particularly with the rapidly changing international environments, and globalization. Hofstede stated that cross cultural outcomes depends on the centuries of training (Jones, 2007). Too few elements: Five elements do not provide enough information about the cultural differences. He agrees to this criticism and believes that additional dimensions or elements should be added to the original work (Jones, 2007). Importance of Hofstede Work for Organization Globalization is portraying the cultures or traditions of the entire world simultaneously and also changing the perception of business. Internationalization while offering many opportunities, also presents various challenges to businesses. Among the challenges, most significant is to identify and understand a range of cultural values as well as practices of individuals from various divisions of the world. The most important and first study to scrutinize various practices and cultural values internationally was accomplish by Hofstede. He describes culture as “combined programming of mind which distinguishes the group of people or member of one set from another” (Mutschink, 2007). Hofstede’s research has significant connotation for managing the employees or workers around the globe. This is explained by his five crucial cultural dimensions (McFarlin and Sweeney, 2014). Hofstede’s contribution is very vital to organizations work as it presents basic idea to the supervisors about the concern for customs or culture which assists them to recognize how to construct successful change practices as well as how to stay away from making error and unsuccessful projects of organization development around the globe. Hofstede’s work explains that people in every culture carry around “psychological programs” that lead their behaviour. When functioning in global companies, supervisors provide training to their workers to make them aware towards the cultural differences, and also to build up better business practices across countries. The dimensions of Hofstede provide guidelines intended for defining culturally suitable approaches to the corporate organizations. Critical Assessment On the average of 53 surveyed nations, Germany displays a high score while USA’s score is low on the “uncertainty avoidance” (Cahill, 2006). Therefore the United States of America does not panic from unknown or change risks; grasp modernization as well as exhibit an unlock/open attitude. On the other hand, Germany mistrust unknown behaviour, innovation and change, unwavering business relationship, and encourage information sharing. On the collectivism/individualism dimension, both USA and Germany are more individualistic, however the USA are more extreme as compared to the Germany. Hence, the USA hassle the behaviour of opportunity taking, perceive business connections as impersonal, as well as subscribe to the dynamic self-concept. Whereas, the Germany displays a few collectivist traits and give more significance to the personal bonds (Cahill, 2006). From Hofstede’s work it was also found that there is a negative relationship between Individualism and Power distance. For example, India and France are high in term of power distance and low in terms of Individualism (Williams, Satterwhite and Saiz, 1998). Conclusion This paper has presented an assessment of Greet Hofstede’s contribution on the cross cultural disparities. His concept of national culture was the foremost move in the intercultural communication and also in modern intercultural investigations. The essay incorporated argument in favour of Hofstede and also against his research. Despite the criticism, his dimensions stay the most important piece of effort on culture for practitioners as well as for scholars. It has also shown the critical analysis of his two dimensions on Germany and USA. The dimensions of Hofstede provide guidelines intended for defining culturally suitable approaches to the corporate organizations. As an outcome, Hofstede’s work is expected to have importance now and also in the future. Reference List Aswathappa, K., 2010. International Business. United States: Tata McGraw-Hill Education. Black, R.J., 2003. Organizational Culture: Creating the Influence Needed for Strategic Success. Cahill, D.L., 2006. Customer Loyalty in Third Party Logistics Relationships: Finding from Studies in Germany and the USA. Heidelberg: Springer Science and Business Media. Chhokar, J.S., Brodbeck, F.C. and House, R.J., 2013. Culture and Leadership Across the World: The GLOBE Book of In-Depth Studies of 25 Societies. London: Routledge. Cullen, J. and Parboteeah, K.P., 2013. Multinational Management. United States of America: Cengage Learning. Falkenreck, C., 2009. Reputation Transfer to Enter New B-to-B Markets: Measuring and Modelling Approaches. Heidelberg: Springer Science and Business Media. Gannon, M.J., 2001. Working across Cultures: Applications and Exercise. London: SAGE Publication. Harrison, R. and Stokes, H., 1992. Diagnosing Organizational Culture. San Francisco: Pfeiffer. House, R.J., Javidan, M., Dorfman, P.W. and Luque, M.S., 2006. A Failure of Scholarship: Response to George Graen’s Critigue of GLOBE. Academy of Management Perspective, pp.102-114. Johnson, D. and Turner, C., 2010. International Business: Themes and Issues in the Modern Global economy. London: Routledge. Jones, M.L., 2007. Hofstede – Culturally Questionable? [pdf] Available at: [Accessed 25 Nov 2014]. Landy, F.J. and Conte, J.M., 2007. Work in the 21st Century. New Delhi: Tata McGraw-Hill Education. Martineau, H., 2000. Retrospect of western Women. United States of America: M.E. Sharpe. Martinelli, S. and Taylor, M., 2003. Intercultural Learning T-kit. Strasbourg: Council of Europe Publishing. McFarlin, D. and Sweeney, P.d., 2014. International Management: Strategic Opportunities & Cultural Challenges. London: Routledge. Middlewood, D. and Lumby, J., 1998. Strategic Management in Schools and Colleges. London: SAGE Publication. Molina, A.F., 2005. International and Intercultural Communication. Denmark: Aalborg University. Mullins, L.J., 2009. Management and Organizational Behaviour. New Delhi: Pearson Education. Mutschink, J.M., 2007. Manager’s National Culture and its Impact on Response Styles in a Global Multinational Company. Ann Arbor: ProQuest Information and Learning Company. Nunez, C., Mahdi, R.N. and Popma, L., 2007. Intercultural Sensitivity. Netherlands: Royal Van Gorcum. Palomar., 2006. What is Culture? [online] Available at: [Accessed 25 Nov 2014]. Paul, J., 2008. International Business. New Delhi: PHI Learning Pvt. Ltd. Pill, S.J., 2006. Understanding the Intercultural Differences between Germans and the French in the Working environment. Hamburg: Diplomica Verlag. Safi, A.E.A., 2010. Argument in Support and Against of Hofstede Work. [online] Available at: < http://www.academia.edu/1375094/Argument_in_Support_and_Against_of_Hofstede_Work> [Accessed 25 Nov 2014]. Sandiego., n.d. Hofstede’s 5 Dimensions. [pdf] Available at: [Accessed 25 Nov 2014]. Stacy, R., 1993. Strategic Management and Organizational Dynamics. London: Pitman. Watkins, M., 2013. What is Organizational Culture? And Why Should We Care? [online] Available at: [Accessed 25 Nov 2014]. Williams, J.E., Satterwhite, R.C. and Saiz, J.L., 1998. The Importance of Psychological Traits: A Cross-Cultural Study. Heidelberg: Springer Science and Business Media. Witzel, M., 2003. Fifty Key Figures in Management. United Kingdom: Psychology Press. Young, M. and Jude, M., 2008. iExec Enterprise Essentials Companion Guide. New Delhi: Pearson Education India. Read More