Management and Culture: Values of Workforce Globally - Essay Example

?Management and Culture Table of Contents Executive Summary 2. Terms of Reference 3. Overview of the Situation……………………………………………………………....2 3.1 Hofstede’s Cultural Dimensions – Philippines……………………………………….2 4. Analysis of the Situation…………………………………………………………………6 4.1 SWOT Analysis………………………………………………………………………6 Strengths……………………………………………………………………………..6 Weaknesses…………………………………………………………………………..7 Opportunities…………………………………………………………………………7 Threats………………………………………………………………………………..8 4.2 PEST Analysis………………………………………………………………………..8 Political Factors………………………………………………………………………8 Economic Factors…………………………………………………………………….9 Social Factors…………………………………………………………………………9 Technological Factors………………………………………………………………..9 5. Solutions and Recommendations…………………………………………………………9 6. Forecasts and Outcomes…………………………………………………………………10 7. Reference List……………………………………………………………………………12 8. Glossary………………………………………………………………………………….13 1. Executive Summary An interplay of economic, technological, social and political events in diverse countries generally have significant influence on the attitudes and values of work force globally. In the Philippines, for instance, starting in the early 1980s until contemporary times, the work culture has undergone a decided shift. More questioning of authority and challenging of the organization system, whether public or private, have been observed. The work force is becoming outspoken, articulate and less willing to be dictated to and driven without their involvement and control. The aim of the essay is to proffer management issues in the Philippines, as representative of an Asian culture, and compare it with other prominent management practices in the West. The discourse would be presented with reference to culture theories such as those of Hofstede’s cultural dimensions to solve management problems for a client. 2. Terms of Reference As a group of professionals with diverse cultural orientations, the task given is to prepare a briefing paper to a client in solving management problems in an organization in the Philippines. Our group is composed of one man from Kuwait, one lady from Nigeria, two men from India, and one man from Pakistan. The client is a British national tasked in managing a global organization in the Philippines. He is particularly interested in determining management practices in the Philippines, as well as cultural orientation (values, preferences, religion) that influences the way people work in an organization. The cultural orientation of a nation significantly reflects the intricate interaction of attitudes, values, behavior and perceptions manifested by the local population. Using Hofstede’s cultural dimensions, the client is requiring an assessment of each cultural dimension as it pertains to management practices in the Philippines, as compared to other management practices in organizations in the West. The information gathered would be used to assist the client in applying the appropriate management and leadership style needed to solicit the required action towards the achievement of organizational goals. 3. Overview of the situation The wide range of concepts that encompass culture theories in managing organizations make presenting a simple discussion virtually challenging. The client was inquisitive in determining which particular dimension from Hofstede’s five cultural dimensions significantly affect management practices in organizations in the Philippines. To address this, the research would delve into the results of Hofstede’s research focusing on Philippine’s “values in the work place (that) are influenced by culture” (Hofstede, 2009). After identification of the prominent cultural dimension, the client would require suggestions on the most effective management theories that need to be applied in the Philippine work setting. The recommendation would be given after an analysis of the alternative courses of action based on SWOT is presented. 3.1 Hofstede’s Cultural Dimensions – Philippines The study of Geert Hofstede on cultural diversity in the workplace is renowned due to the applicability of its findings in diverse cultural settings. In a research conducted by Cobb (2009), it was revealed that the study of Hofstede comprised of surveying people coming from seventy countries to evaluate cultural diversity in organizations using four dimensions: individualism, power distance, masculinity, and uncertainty avoidance. Individualism was explained in terms of the ability of people to tend for oneself and the nuclear family. It was contrasted to collectivism, a trait where the group is the primarily focus. Power distance, on the other hand, is a dimension which manifests inequality in power within a group, or within an organization. Masculinity manifests some predominant elements in terms of centering on money, success, and material things. This is contrasted to feminism which focuses on the emotion of caring and .emphasis on quality of life. Finally, uncertainty avoidance simply evaluates the degree by which people tend to fear things for the unknown (Cobb, 2000, p. 9). Long term orientation is identified as the fifth cultural dimension that was recently included in the discourse. The significance of Hofstede’s study is recognized in terms of its practical implications to global organizations as they realize that culture impacts local practices as compared to those values and preferences that global managers were traditionally used to from their points of origin. In the case of the Philippines, Hofstede’s study reveals the following, as illustrated below: Source: Hofstede, 2009 From the illustration, it can be deduced that organizations in the Philippines are significantly affected by the cultural dimension of power distance (90%), followed by masculinity (60%). In a related research conducted by Curtiss (n.d.), the author explained the power distance dimension as the degree by which a certain culture places relative importance to hierarchical levels of authority. As the term implies, there is a distance between those people regarded to have some form of power vis-a-vis those who belong to the lower rank. The diversity in rank or levels is manifested in the way people dress, communicate, and behave. The interpretation for the score is that the higher the resulting score, the greater the perceived gap in equality of power. Hofstede’s study reveal that countries generating high power distance scores come predominantly from Asia, specifically countries such as India, China, the Philippines, and Arabic speaking countries. In contract, countries manifesting lower power distance scores are those from the Western hemisphere, such as Sweden, the USA, and Denmark. From Hofstede’s results, the United States of America generated a low power distance score which means that management and leadership styles manifest equality in rank which encourages interaction and open communication, cooperation, collaborative efforts to attain well defined goals of the organization. The client could be apprised by citing an actual situation in the management practice and leadership style of John Francis Welch, Jr., the renowned former CEO of General Electric. Welch’s management style was revealed as making surprise rounds around the organizational premises, scheduling meetings at very short notices, and writes personal notes to employees. The leadership style manifests hands-on commitment and dedication to move personnel towards identified goals in such an intricate firm (Byrne, 1998, par. 22). The distinct traits exhibited by Welch focus on meeting and interacting directly with his employees regardless of their level in the organizational hierarchy. His charismatic nature encourages open communication and the perception of equality that minimizes any gap in the power distance index. In contrast, research on large organizations in the Philippines show diverse layers and levels in the organizational structure which inhibit open communication to higher echelons. As averred by Buenaventura (2008), “the Philippines is the 4th highest in the global Power-Distance index list” (par. 2). Managers and leaders are regarded as superiors and majority of the personnel are oriented and trained not to speak up nor voice their opinions in the presence of authority. “Accordingly, exceedingly subtle language (the technical term is “mitigated speech“) is used in an effort to get messages relayed without offending the boss, or clients, or anyone else that one is socially obligated to show respect to” (Buenaventura, 2008, par. 3). The crucial implication for this cultural dimension in terms of management practice lies in repercussions in the decision-making process, in general. Due to the long chain of command, business correspondences, proposals and comments are not relayed at the soonest possible time to authorized decision makers. The effects are backlogs in needed concerns for approvals and recommendations, as well as delay in communication and feedback which seriously affect the smooth transition and implementation of business processes. In analyzing the masculinity dimension, the research conducted by Yates (2005) indicates that masculinity, as a cultural dimension focuses on the role of gender, particularly the male gender, in various endeavors such as in organizational performance; in the degree of competition among individuals and on perceive equality. In countries were masculinity plays a significant role, leaders and managers are seen to manifest an aggressive and assertive stance in terms of decision-making. In Hofstede’s study, the country exemplifying a high score in masculinity index is Germany. In case of its applicability in the Philippine setting, the effect of gender is eminent as men still comprise majority of senior management workforce, validating the need to manifest assertiveness and to be decisive in the decision-making process. Martires & Fule (2000) averred that “familism is another phenomenon that greatly affects Filipino organization culture. It is the need to belong to a family or group and as such, the family is considered and used against a potentially hostile world, an insurance against hunger and old age, an eternal source of food, clothing and shelter and an environment where a Filipino can be one’s self. For the Filipino, the basic needs are met if he has a family, the first and most important group. Thus, the need for him to establish kinship is very potent and strong. He sees himself first as member of the family and only secondly, of an outside group, whether it is his office or company. He is expected to maintain company loyalty so long as its objectives do not conflict with the objectives of his family” (Martires & Fule, 2000, p. 235). 4. Analysis of the situation 4.1 SWOT Analysis The use of SWOT analysis was originally conceptualized by Christensen, Andrews & Bower (1978) when they cited Howard H. Stevenson, as an instrumental pioneer in the research of theoretical applications in management in terms of identification of both strengths, as well as weaknesses. He looked at five aspects of the process: (1) the attributes of the company which managers examined, (2) the organizational scope of the strengths and weaknesses identified, (3) the measurement employed in the process of definition, (4) the criteria for telling a strength from a weakness, and (5) the sources of relevant information” (p.254). With the identified potential problems in the Philippine organization with which the client is expected to manage, an analysis of current management practices and cultural orientation influencing organizations are enumerated as follows: Strengths: The strength of the management system and leadership style conforming to strict delineation of lines of communication, chain of command, levels of organizational hierarchy are seen in terms of clear identification of roles and responsibilities in the organizational structure. This would avoid confusion and chaos in terms of structures and processes in communication; where correspondences are accurately identified in terms of location on levels of decision-making and recommendations. Familial affiliations can provide the motivating factor for performance. Weaknesses: The system of layered or levels of communication and chain of command could significantly delay decision-making process. Lower staff level’s opinions and comments could never be addressed directly to the CEO and higher senior managers. Further, if and when organizations manifest inequality in terms of gender performance (if males are given more opportunities for promotion, for example), there would be tendencies for perceptions of unfair labor practices, contrary to ethical standards of behavior. Opportunities: The presentation of Hofstede’s cultural dimension indices which significantly affect Philippine organizations provide opportunities to address weaknesses in the structure of organization and could assist global managers to incorporate cultural values in applying leadership styles. The client, as a British manager, could encourage open communication by being a role model to manifest benefits of gaining immediate feedback and limiting communication channels, as the situation requires. Knowledge of focus and priority given by Filipinos to their respective families could be used to incentives and motivational schemes which would benefit the family, as a whole. In addition, by acknowledging the value of equality and diversity in culture, opportunities for equally promotion and advancement would create a positive atmosphere for increased motivation and productivity in the workplace. Threats: There could be tendencies to impose the managers’ cultural values and orientations to the subordinates, as the situation requires. Imposition of drastic changes in management style and applications of theories could be met with resistance and cause conflict in the organization. 4.2 PEST Analysis The PEST analysis, as indicated by Morrison (2007) is a guide to better evaluate the external environment through identified factors to enable the organization to appropriately match opportunities, address threats, and capitalize on strengths in the internal environment (Morrison, 2007, par. 1). In this situation, the following factors are deemed essential in analyzing current management practices in the Philippine setting, in conjunction with the people’s cultural orientation: Political Factors: The political environment in the Philippines is optimistic given the new administration’s stance to fight corruption under the leadership of President Benigno “Noynoy” Aquino. As indicated by Whelan (2009), the political environment of the Philippines explicitly allows full ownership of organizations by foreign investors, with sporadic sectors imposing certain restrictions to limit the percentage of foreign ownership. However, the cultural orientation of the people focus on being nationalistic and the tendency to patronize local products and services (p. 1). Despite some restrictions, latest reports on multinational corporations in the Philippines noted statistics indicating that there are “4880 senior executive contacts at 1190 leading US, European and Asian multinational companies and key local companies across 34 industry sectors in Philippines” (Business Monitor International, 2010). This indicates continued support and investment of foreigners in business organizations in the country. Economic Factors: Under the governance of the newly elected president, the economic status of the Philippines remains significantly positive. Tan (2010) averred that there are forecasts indicated by businessmen from Europe that the economy would turn for the better starting in 2010 with growth prospects possibly being stirred in the following sectors: agri-business, electronics, business process outsourcing (BPO), retail, and property development, among others (Tan, 2010, par. 1). Investments from global organizations would be encouraged given the stance to promote tourism and development in various sectors of the economy. Social Factors: Social factors are evaluated by looking at the following crucial elements: “consumer attitudes and opinions, media views, law changes affecting social factors, brand, company, technology image, consumer buying patterns, major events and influences, buying access and trends, ethnic/religious factors, advertising and publicity, ethical issues, demographics (age, gender, race, family size,), lifestyle changes, population shifts, education, trends, attitudes, earning capacity,” (Morrison, 2007, par. 17). Management practices should therefore encompass the abovementioned factors in designing strategies pertinent to products or services and in communicating with various stakeholders. Technological Factors: The pace of technological developments in the Philippines needs to be considered in terms of its impact on the product or services offered by various organizations. If products are significantly influenced by updates in technology (such as mobile devices, computers, communication gadgets), there is a need to ensure that substantial investments are in place for accommodating latest trends and brands. 5. Solutions and recommendations Given the information on management and culture in the Philippines and the need to align the client’s personal values and cultural orientation with organizational goals, the alternative courses of action are enumerated herein: (1) Continue to evaluate other areas in the organization where cultural orientation significantly affects work. Other cultural dimensions of individualism, uncertainty avoidance, and long term orientation should be determined, if applicable to the Philippine setting. (2) Personal and professional experiences on management practice that could improve the accomplishment of goals in the organization, as compared to those practiced in the home country, could be slowly introduced to the Philippine setting, as deemed appropriate. (3) To avoid resistance to change, planned steps to improve processes, systems, structures, or even organization culture, need to be relayed to the employees. They must be given the chance to evaluate the consequences of the proposed change and to give comments and feedback, in the process. (4) Manage by culture. Dr. F. Landa Jocano (1990) discusses how managers can manage by culture. He treats first on Filipino values which every manager should be cognizant of. With emphasis on the theme that there are no bad Filipino values and that there is no weakness in the Filipino character, he avers that much of the present predicament is the result of mismanagement of human and non-human resources, the maladministration and lack of proper implementation of laws and policies, and of misunderstanding the traditional culture. 6. Forecasts and outcomes Every organization should strive to identify and develop the best of its culture. The proliferation of global organizations deems it crucial to incorporate the concepts of cultural diversity in their policies and procedures. In the formulation of strategic plans and in dealing with an array of organizational and global issues, a highly involved manager must obtain and analyze information on external factors in the environment that influences the organization one manages and leads. With Asia emerging as a region with strong indications of robust economic growth and with the implementation of the free market system, the Asian region is viewed as a huge market place with new manufacturing centers and multinational corporations being established. This reality of global competition will challenge the Asian manager and their Western counterparts to lower costs, increase productivity, and improve the quality of their products and services. In the Philippines, discipline and proper work ethics are the much needed keys to success. Relatively, Filipinos are imbued with language and communication skills, creativity and adaptability to rapid changes. Global managers must therefore focus on the need for strong management commitment and leadership to articulate a high involvement culture. As Martires & Fule (2000) stated: “how does management vary across cultural systems? While it has been averred by many practitioners and academicians that management principles are the same throughout the world, their application varies in different countries due to varying cultural systems” (p. 233). The authors added “identifiable cultural differences may make it inappropriate to take management theories and practices from the culture in which they were developed and apply them to another culture. Foreign management practices may require modification before they are applied in a particular culture” (Martires & Fule, 2000, p. 234). The paper was therefore able to achieve its objective of presenting cultural and management theories in a particular country, the Philippines. By using the cultural dimensions developed by Geert Hofstede, the client was apprised of the significant dimensions that influence work related practices in the Philippine setting. An awareness of these indices revealed which management applications were crucially influenced through a presentation of a SWOT analysis, as required. The alternative courses of action open to the client were likewise enumerated and discussed shedding light to areas that need emphasis and focus, especially in terms of incorporating culture in various management and leadership applications. Well run global organizations have developed cultures that are distinctive and responsible for the creation, implementation, and maintenance of their world leadership positions. 7. Reference List Buenaventura, L 2008. Power Distance, or Why I Have to Call you “Ser”, [Online]. Available at: http://guttervomit.com/2008/11/16/power-distance-or-why-i-have-to-call-you-ser/ [Accessed 14 January 2011]. Business Monitor International 2010. Multinational Companies in the Philippines, [Online]. Available at: http://www.businessmonitor.com/dir/philippines.html [Accessed 18 January 2011]. Byrne, J 1998. “How Jack Welch Runs GE.” Business Week, [Online]. Available at: http://www.businessweek.com/1998/23/b3581001.htm#Main%20Story [Accessed 14 January 2011]. Christensen, CR, Andews, KR, & Bower, JL 1978. Business Policy: Text and Cases. Richard D. Irwin, Inc. Illinois. Cobb, SL 2000. A Survey of Ethics and Cultural Dimensions of MNCs, [Online]. Available at: http://www.allbusiness.com/human-resources/employee-development-employee-ethics/719260-1.html [Accessed 14 January 2011]. Curtiss, J n.d. Power Distance, [Online]. Available at: http://www.jimcurtiss.com/powerdistance.htm [Accessed 14 January 2011]. Jocano, FL 1990. Management by Culture. Punlad Research House, Philippines. Hofstede, G. (2009). Geert Hofstede’s Cultural Dimensions (Philippines), [Online]. Available at: http://www.geert-hofstede.com/hofstede_philippines.shtml [Accessed 14 January 2011]. Martires, CR & Fule, GS 2000. Management of Human Behavior in Organizations. National Bookstore. Philippines. Morrison, M (2007). PEST analysis tools, [Online]. Available at: http://rapidbi.com/created/pestanalysis.html [Accessed 19 January 2011]. NetMBA (2010). SWOT Analysis, [Online]. Available at: http://www.netmba.com/strategy/swot/ [Accessed 19 January 2011]. Tan, RL 2010. Economic Status of the Philippines 2010, [Online]. Available at: http://rexjlt.wordpress.com/2010/03/07/economic-status-of-the-philippines-2010/ [Accessed 18 January 2011]. Whelan, P 2009. Philippines, [Online]. Available at: http://www.edc.ca/english/docs/gphilippines_e.pdf [Accessed 18 January 2011]. Yates, M 2005. Cultural Differences: It's More than Geography that Matters, [Online]. Available at: http://www.growing-global.com/detail.asp?ID=23 [Accessed 14 January 2011]. 8. Glossary Hofstede’s Cultural Dimensions – an evaluation of five cultural indices that influence people in the workplace: power distance, uncertainty avoidance, individualism, masculinity, and long term orientation. Individualism - is the tendency of people to take care of themselves and their immediate family, as opposed to collectivism where people form groups and the group takes care of its members. Masculinity - has as its dominant features success, money and things, as opposed to femininity where caring for others and the quality of life do. PEST analysis - is “a useful tool for understanding the “big picture” of the environment, in which you are operating, and the opportunities and threats that lie within it. By understanding the environment in which you operate (external to your company or department), you can take advantage of the opportunities and minimize the threats” (Morrison, 2007, par. 1). Power Distance - means that less powerful members of a group accept that power is not distributed evenly. SWOT analysis - is “a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans… the SWOT analysis is useful when a very limited amount of time is available to address a complex strategic situation” (NetMBA, 2010, par. 1). Uncertainty avoidance - relates to the extent that people are threatened by ambiguous situations. Read More