Organisational Cultures and National Cultures

The assertion that the culture of an organisation is likely to reflect the national culture in which that organisation is located is beguiling in its simplicity; however is there any concrete evidence to support this theory? In “Cultures and Organisations: Software of the Mind: Intercultural Cooperation and Its Importance for Survival”, Hofstede et al, 2010, McGraw-Hill, the authors take the organisational theories of Mintzberg and compare them with national cultures as determined by Hofstede’s cultural dimensions.

Mintzberg’s research led him to identify five key “parts” of an organisation along with five preferred “coordinating mechanisms”. Combining these into pairs led to the theory of five different organisational “configurations” (or “cultures”). Hofstede’s research into the cultural dimensions of power distance (the acceptance of unequal power distribution) and uncertainty avoidance (the extent of discomfort with uncertainty) led to certain groupings of national cultures according to the nation’s “position” on a graph when plotting the two dimensions against each other. Combining these two empirically extensive researches led to some interesting results.

Here is a summary followed by a consideration of further implications (“et alors”).

Organisational Cultures and National Cultures

The five different organisational cultures show the following characteristics and relate to the following national cultural dimensions as follows:

Adhocracy

The key part is the support staff (people in staff roles supplying services) and the mechanism is “mutual adjustment” (of people through informal communication).

This corresponds with national cultures demonstrating low power distance and weak uncertainty avoidance. Example: Denmark.

Professional Bureaucracy

The key part is the operating core (the people who do the work) and the mechanism is the standardisation of skills (specifying the training required to perform the work).

This corresponds with national cultures demonstrating low power distance and strong uncertainty avoidance. Example: Austria.

Full Bureaucracy

The key part is the “technostructure” (the people supplying the ideas/expertise) and the mechanism is the standardisation of work processes (specifying the contents of work).

This corresponds with national cultures demonstrating high power distance and strong uncertainty avoidance. Example: France.

Simple Structure

The key part is the strategic apex (the top management) and the mechanism is the direct supervision (by a hierarchical superior).

This corresponds with national cultures demonstrating high power distance and low uncertainty avoidance. Example: China.

Divisionalised Form

The key part is the “middle line” (the hierarchy in between) and the mechanism is the standardisation of outputs (specifying the desired results).

This corresponds with national cultures demonstrating medium power distance and medium uncertainty avoidance. Example: USA.

Et alors?

Given the above, what is the best organisational culture for a multinational company? At first glance, it might appear to be the “divisionalised form” given that it is the only organisational “configuration” proposed by Mintzberg which is not situated at one of the “corners” (low-low, low-high, high-low and high-high) of the plot as defined by Hofstede. However a closer look reveals that this organisational culture is not universal but rather suited to those national cultures that are neither low nor high on any of the national cultural dimensions: in other words, unique in their own way. This might be further evidenced by the popularity of management theories in the USA – according to Mintzberg this is where the power lies; however US management theories are not universally exportable worldwide – many “fail” in application because of cultural “friction”.

An alternative multinational / multicultural solution might be to try and implement the best of each organisational culture; but this might result in cultural resistance in every nation and actually deliver the worst possible organisational culture. At the other extreme, a more ethnocentric reflex would be to simply say that the organisational culture which best reflects the national culture of those who have the power should be universally applied and everyone “else” in the organisation should follow; however this might actually disengage a significant minority or a “silent” majority of the organisation. The best solution might therefore be for a multinational organisation to behave more like a confederation of various different sub-cultures all working comfortably according to their own national references.

The key to success would then rest in the interaction between the different cultures. If awareness is increased and all “sub” cultures adapt to each other’s way of working then the overall organisation could function well not only despite internal differences but profiting from diversity. To take for example a French “full bureaucracy” doing business with a Chinese “simple structure”, on the one hand, the Chinese might have to accept that they will have to deal with a bureaucracy which is “normative” in its approach; on the other hand, the French will have to accept the pragmatism and entrepreneurial way of doing business in China. Notwithstanding discomfort, at the interface of two cultures, “comfort” might be found when there are common similarities – given the high power distance both the French and the Chinese might accept and enjoy having the most senior person present at the negotiations! Dynamic adaptation takes a lot of effort since it is always at the interface of two cultures amongst many possible combinations but in terms of developing the culture of a multinational organisational it might be a worthwhile investment for the future.