Cultural Differences and Motivational Factors in International Organisations - Essay Example

Cultural Differences and Motivational Factors in International Organisations Chapter One Introduction The structure and the operation of international organizations could be compared with that of firms. More specifically, apart from the issue of their purpose (profit in the case of business and parts of public interest in the case of IOs) and their governmental body (leader in firms, Council in IOs) international organizations and multinational firms share many common characteristics. For this reason, when referring to culture and motivation as aspects of the operation of International organizations, we could use theories and views that are related with business activity. At a first level, it should be noticed that the development of motivation within International organizations (after taking into account the cultural differences of the employees) can be achieved only through the implementation of the appropriate plan of change. In other words, existing strategies need to be reviewed and redesigned offering the necessary basis for the increase of motivation among employees and the following increase of their performance. Towards this direction, it is stated by Karp et al. (2000, 451) that ‘the strategy is to create changes that will have a long term positive impact on the organizational culture, with the objective of creating a safer and more productive working environment for all organizational members’. On the other hand, Schuler et al. (1998, 159) who refer specifically to the structure of HR policies applied by multinational firms, supported that the following criteria should be taken into account when designing and applying a particular HR strategy: ‘a) the business structure, b) the legislative and employment relationship context, c) the patterns of HRM competence and decision-making and d) the national culture’. From a similar point of view, Kesler et al. (1997) tried to examine the current processes used by firms when developing a particular HR strategy and came to the conclusion that these processes could be summarized to the following ones: ‘a. aligning organization, b. developing capabilities, c. managing performance’ (Kesler et al., 1997, 30). All the above issues involve mainly in multinational corporations; however they could be equally applied in International Organizations under the terms already explained above. Specifically regarding the International organizations Clark (1995, 507) supported that ‘international non-governmental organizations (NGOs) have proliferated in the latter half of the 20th century; many of these transnational actors are new to world politics, a province that historically has been dominated by states; in some issue areas, NGOs have acquired significant authority in the eyes of transnational actors’. In other words, international organizations need to develop the appropriate HR policies in order to respond to the increased needs of citizens worldwide for the provision of appropriate and sufficient protection against the potential violation of their rights. Another issue that should be mentioned here is the fact that international organizations despite the fact that they are governed primarily by the rules of their country of origin, they should respect the principles of their host country trying to avoid any conflict of regulations (appropriate adaptation of the rules of the country of origin to the national framework related with the operation and the monitoring of International organizations). In the case of multinational firms, it is suggested by Ulijn (2000, 293) that ‘a global economy requires business organizations to cultivate their international holdings by respecting the national differences of their host countries and coordinating efforts for rapid innovation’. However, the level of influence of national legal framework of the host country on the relationship between the host country and a country of the international community can be differentiated through the years in accordance with the changes that will take place in the meantime in the social, cultural and legal rules of the host country but also the interests of the country of origin (who are going to be altered also). Chapter Two Culture and International Organization Culture has a significant role within the organizational environment. In accordance with the study of Soutar et al. (1999, 203) ‘culture is an important idea as it deals with the way people live and approach problem solving in a social and organizational context’. On the other hand, Herbig et al. (1994, 33) noticed that ‘the function of culture is to establish modes of conduct, standards of performance, and ways of dealing with interpersonal and environmental relations that will reduce uncertainty, increase predictability and thereby promote survival and growth among the members of any society’. It should be noticed that culture can have a different role among organizations promoting or delaying the development of a specific firm. Indeed, the study of Kramer et al. (1994, 37) led to the conclusion that ‘the cultural dimension can significantly influence and complicate the processes and dynamics associated with international business transactions’. In accordance with the above, every leader needs to pay particular attention on the development of firm’s culture because the latter is closely related with the improvement of the firm’s position in the market – a culture that is aligned with the market’s trends and principles is more likely to enhance the business performance than a culture that remains stabilized for a long period. From a different point of view, culture can be used in order to enhance business communication. The specific issue was examined by Mahin (1998, 74) who came to the conclusion that ‘business communication uses the same forms - causal analysis, classification, process analysis, evaluation - as other forms of composition and that the very act of communicating in the social context of a business culture implies an ethical basis, a respect for persons’. Apart from its significant role in the development of internal and external channels of communication, culture can be used when trying to identify the similarities in strategies of firms that operate within the same market. In this context, the existence of similarities in culture between two firms can lead to the assumption that these firms have common elements in their strategies and even in their operational structure. It is for this reason that Gooderman et al. (1999, 507) supported that ‘despite their very different assumptions, both rational and institutional explanations of organizational structure and management practices predict similarity among firms that operate in the same industry within the context of a simple country’. As mentioned above, culture has a primary role in the development of appropriate corporate strategies, in the classification of a firm within its market and the evaluation of its relationship with other firms that operate in the same industry. As of its content, culture can be expanded in many issues: diversity is considered to be one of the most characteristic aspects of organizational culture. In this context, it is supported by Mathews (1998, 175) that ‘before diversity strategies are implemented, the organizations cultural environment, management and evaluation systems should be examined to ascertain if existing personnel/human resources processes will support or hinder diversity in the organization’. In other words, the policies applied within a specific firm in relation with its human resources have to be aligned with the firm’s culture. Figure 1 – Culture – description (source: Craig et al., 2006, 324) Culture can intervene in many aspects of organizational activity. As an example in the case of a merger, culture is a significant criterion for the evaluation of the firm’s strength and its prospects for the future. The particular issue was examined by Olie (1994) who focused specifically on ‘the way in which the merged companies cope with difficulties emanating from firm-specific and nation-specific differences’ (1994, 381). The study of the above researcher revealed a series of interested findings referring to the relationship between culture and merger (as a particular business initiative). More specifically, it was found that the particular procedure (merger) is based on four main factors: ‘(1) the degree of compatibility of administrative practices, management styles, organizational structures or organizational cultures; (2) the kind and degree of post-merger consolidation; (3) the extent to which parties value and want to retain their organizational integrity; (4) the nature of the relationship between the two organizations’ (Olie, 1994, 381). In other words, culture is expected to play a major role in the completion of any relevant attempt (merger). In the long term, culture could be also used in order to evaluate the most appropriate methods for the development of the firm’s performance – referring to the firm that will be resulted from the ‘merged’ companies. More specifically, the culture of both firms before the merger will be identified. At a next level, this culture will be evaluated in terms of its significance for the firm resulted by the specific merger. The most valuable elements of both firms’ culture will be retained and have to be applied on the new firm. In this way, culture is considered to have a significant role in the development and the success of the merger procedure. As already explained above the importance of culture for the organizational performance is significant. However, there are specific sectors within each firm that are more related with its culture. Human resources as mentioned previously is the most characteristic sector (in any business) that is depended on culture. Regarding this issue, it is noticed by Barinaga (2007, 315) that ‘cultural differences are given explanatory authority, cultural diversity acquiring a positivist status, and group members being treated as ‘dopes of their culture’. The study of the above researcher also revealed that under specific circumstances, especially in relation with an international project that requires the evaluation and the processing of many info related with a particular business area ‘group members shaped and developed their international project in important ways by using the discourses on ‘national culture’ and ‘cultural diversity’ to excuse confusion and misunderstanding, to position themselves vis-à-vis the group, to justify decisions and to give the group a raison dêtre’ (Barinaga, 2007, 315). In other words, culture within a specific organization can influence the development of the firm’s relationship with its competitors. On the other hand, culture of the firm could be of significant importance regarding the activation of the firm within its industry. Moreover, international business activities are proved to be related with culture mostly because it depends on the form and the needs of the firm involved (or the individual in terms of the evaluation of the skills/ competencies of the employees in all firm transactions). The above assumptions are also supported by the results of another research. More specifically, in accordance with the study of Suzuki (1998, 155) led to the conclusion that ‘the overall patterns differ between in-group and out-group communication for both the U.S. and Japanese samples’. The above study focused on the examination of the communication patterns used within a specific organization – the main characteristic of which is the fact that it is bilateral (USA and Japan). The general assumption of the above study is that ‘the relationship between social identification and intergroup differentiation is more complex than anticipated’ (Suzuki, 1998, 154). In fact, business activities are not too easy to be controlled or to be monitored. The fact that in a specific firm operational structure is complicated could limit the chances of the firm’s employees to communicate effectively. It should be noticed that the above study has used as a sample USA and Japanese workers. In other cases – i.e. where employees of different origins and cultures are going to be used as a sample – the results produced may be differentiated. However, this difference will be limited. In the case of international organizations, culture can have similar aspects with those described above related with businesses. The study of Steger (2007) referred especially to international organizations and specifically to WTO (World Trade Organization). In accordance with the above study ‘the WTO is an international organization with its own distinctive culture, which is derived from the practice and experience of other international organizations (like GATT)’ (Steger, 2007, 483). An issue that should be highlighted here is the fact that the culture of WTO is mostly formulated by its members. In fact, it is noticed that ‘the Members work together to define the new purpose and mandate of the WTO to make it relevant to governments, companies and people in the 21st century; institutional reform of the WTO is needed to provide it with the architecture and decision making machinery that will allow it to become a vibrant, responsive and accountable organization’ (Steger, 2007, 483). The issues mentioned above could be regarded as similar with those observed in most international organizations. In fact, apart from existing strategies, international organizations proceed to a series of reforms (reviews of their culture and their strategies) in order to be more effective in accordance with their mission. Moreover, because the social and political conditions around the world change constantly, the subsequent change in all aspects of international organizations’ functions should be regarded as necessary in order for these organizations to respond effectively to their obligations (as set in their mission statement). Many efforts have been made towards the identification and the evaluation of the main aspects of culture within modern organizations. A well known theory is that of ‘coordinated management of meaning’ (CMM) theory in which ‘rules are conceptualized as cognitions that individuals employ to create action in interpersonal episodes’ (Rose, 1998, 139). The above theory can be considered as particularly valuable in ‘applying the perspective to one view of multiple cultures in organizations: the interplay between a dominant culture, one whose central values are espoused by top management and are widely shared, and three specific types of subcultures: enhancing, orthogonal, and a counterculture’ (Rose, 1998, 139). The above theory related with the content and the role of culture in business environment can be equally applied in the case of international organizations. On the other hand it should be noticed that the evaluation of a firm’s culture is usually based on a series of assumptions made in accordance with the organizational structure and the targets set by the firm in the long term. In this context, it is noticed by Lenartowicz et al. (1999, 790) that ‘there are several assumptions that we have made regarding culture; first, they have assumed a values-based model of culture; second, they assume that culture is essentially an objective and observable phenomenon; third, they have assumed that culture is relatively stable over time’. However, the acceptance of the existence of the above assumption cannot be followed by the view that all these assumption can co-exist in a particular case. More specifically, it is very difficult to identify all three assumptions within a specific firm. However, it is very likely that these assumptions are developed and that new aspects of culture are being developed through the years in accordance with the changes in the global commercial market and the alteration of the consumers’ preferences. Chapter Three Motivation in International Organizations The role of motivation in the development of corporate activities has been extensively studied in the literature; it seems that motivation can influence the profitability of the firm mostly by increasing the performance of employees. Regarding this issue, it is noticed by Barrick et al. (2003, 30) that ‘an organization could increase productivity simply by increasing the happiness and satisfaction of its employees, and both organizations and employees would benefit’ (Landy, 1989, R. Wright, 2000 in Barrick et al., 2003, 30). In the context specifically of international organizations Klingner et al. (1997, 159) suggested that ‘purchase-of-service agreements with other governmental agencies and non-governmental organizations (NGOs) have become commonplace; the use of outside consultants and businesses (hired under fee-for-service arrangements on an "as needed" basis) increases available expertise and managerial flexibility by reducing the range of qualified technical and professional employees that the agency must otherwise hire to provide training’. In other words, despite the fact that motivation should be preferred as a tool for the improvement of employees’ productivity, in practice the solution of outsourcing is usually preferred by firms internationally. Under these terms, outsourcing should be considered as an obstacle towards the development of motivation among firm’s employees having the opposite result, i.e. creating conflicts within the workplace (these conflicts can be severe delaying the firm’s productivity). As stated above motivation is significant for organizational performance. It is for this reason that a series of theoretical models have been developed in order to explain the role and the importance of motivation for the improvement of employees’ performance. The hierarchy of needs model as presented below in Figure 2 is a characteristic example of the existing theories regarding work motivation. In accordance with this model, the existence of the appropriate environment (in terms of physical needs) is the basis for the development of motivation in the workplace. The rest of ‘human needs’ like love, self-esteem and safety follow. Figure 2 - Maslow’s hierarchy of needs model, 1943-1954 (source: http://www.valuebasedmanagement.net/leaders_maslow_hierarchy.html Another well known work motivation theory is that of Frederick Herzberg. In accordance with Herzberg’s Two Factor Theory ‘people are influenced by two factors: satisfaction and psychological growth was a factor of motivation factors; dissatisfaction was a result of hygiene factors’ (Value Based Management Net, 2007). The Theory of Herzberg is presented in Figure 3 below. Moreover, Moynihan et al. (2007, 803) use the framework of work motivation trying to explain the performance of employees in the public healthcare sector. After applying the particular model, they come to the conclusion that ‘managers have varying degrees of influence over these different aspects of work motivation, with greatest influence over job satisfaction and least influence over job involvement while a number of variables are important for work motivation, including public service motivation, advancement opportunities, role clarity, job routineness, and group culture’ (Moynihan et al., 2007, 803). The above results prove that the performance of employees within the workplace can be influenced by a series of variables. It depends on the ability of its leader to promote the employees’ skills and competencies in order to increase the firm’s productivity especially in the long term. Figure 3 - Frederick Herzberg – Two Factor Theory (source: http://www.valuebasedmanagement.net/methods_herzberg_two_factor_theory.html) Other studies also refer to the role of work motivation in the development of the firm’s performance. In this context, the study of Peterson et al. (2003) revealed that ‘intrinsic motivation depends not only on innate qualities common to all people, but also on socialization into aspects of national culture that support proactive work behaviour; results are are quite similar for supervisor-level employees of local governments in the United States, Japan, and Hungary’ (Peterson et al., 2003, 188). In other words, work motivation is an issue common for all workplaces around the world. The problem is that in each country the practices applied for the development of work motivation can vary in accordance with the existed social and cultural framework, the firm’s structure and the willingness of the firm’s employees to participate into a common effort for the increase of the firm’s productivity. Under these terms, the success of any work motivation plan is closely depended on the communication within the organization (communication in workplace and communication between employees and firm’s administration, i.e. horizontal and vertical communication). It should be mentioned here that the theories used for the explanation of work motivation have been strongly criticized as of their effectiveness towards the result expected. More specifically, in every case that a relevant theory is used in order to support the development of work motivation within a workplace, many parameters often intervene creating severe obstacles towards the successful application of this theory in practice. In this context, in the study of Carlisle et al. (1994) it was revealed that ‘existing theories of work motivation offer an inadequate account of the impetus of employment and should be supplemented by a self-concept based theory of work motivation’ (Carlisle et al., 1994, 183). In other words, despite the fact that many theories have been developed regarding the development and the monitoring of work motivation within a workplace, in practice their application is not always feasible especially in cases where a strong resistance is developed within the particular workplace. Chapter Four Summary/ Conclusion In accordance with the issues presented above, work motivation has a significant importance for the development of firm’s performance – mostly through the increase of employees’ productivity. In this context, it is noticed by Ramlall (2003, 60) that ‘it is only through performance measuring that one can really articulate the benefits of HR strategies in achieving the organizations business strategy and in the process enhance the credibility of the HR profession’. On the other hand, Harris et al. (2004, 156) suggested that ‘the particular set of HR practices that an organization adopts must fit with other organizational factors in order for it to be effective’. However, in every case the cost involved in the relevant initiatives should be taken into account. More specifically, the study of Walker (1998, 9) revealed that ‘costs of human resource processes and initiatives (investment of money, time, and other resources) are best measured in relation to their outcomes while unusually high recruiting and training costs may be justified by the resulting business results achieved; however, such recruiting and training costs should also be evaluated in terms of productivity measures and results achieved’. Of course whenever is considered as necessary, the appropriate work motivation plans should be applied but under the terms that their cost will be carefully estimated in advance. Moreover, the culture of the organization should be taken into consideration. The social and cultural characteristics of the particular society are also elements that can influence the effectiveness of any work motivation plan implemented. In this context, Newman et al. (1996, 753) noticed that ‘work units that are managed consistent with national cultural expectations will be better performing than work units whose management practices do not fit the national culture’. In other words, work motivation will be promoted in those cases where the appropriate plans will be applied on the workplace trying to handle effectively any resistance that may appear within the particular workplace. In any case the success of any work motivation plan is considered to be related not only with the leader’s skills to retrieve the appropriate solutions (regarding the increase of employees’ productivity) but also with the willingness of employees to participate in any relevant initiative. Because of the (expected) fear of violation of existing rights in the workplace, employees should be given the chance to understand thoroughly all parts of the suggested work motivation plan and its benefits both for the firm and for themselves. References Barinaga, E. 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