Arizona State University Business Worksheet

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Session 10: Performance
Management
Job Performance:
• Task performance




Core substantive or technical tasks essential to the job
Effectiveness: the results an employee achieves
Efficiency: the amount of resources dedicated to attain the results
Managers must deal with the inherent tension in balancing these
two key aspects of task performance
Effectiveness
Efficiency
• Contextual performance
 Behaviors that contribute to organizational effectiveness but are
not formally required in the employee’s core tasks
 Also called Organizational Citizenship Behaviors (OCBs)
 Types of OCB: Altruism, Civic Virtue, Conscientiousness, Courtesy,
Sportsmanship
Job Attitudes
Withdrawal behaviors = Avoiding or leaving work
Job satisfaction = how someone feels about his or her job
Organizational Commitment = the extend to which an
employee identifies with the organization and desires to
remain a member
Affective Commitment = an emotional attachment to the
organization
Normative Commitment = feeling of obligation to stay with the
organization
Continuance Commitment = a desire to stay with the organization
because costs of leaving outweigh the benefits
Organizational cynicism = An attitude of contempt,
frustration, and distrust toward something
The Performance Management Cycle
Choose the
right person
for the job
Set
performance
expectations
Feedback
performance
Assess
performance
Setting Performance Expectations
• Establish a mutual performance contract to stipulate
performance expectations
• Topics to address in the contract:





Critical job tasks
Performance goals
Professional conduct
Resource requirements
Developmental goals
• Ensuring goal commitment







Make it public
Be supportive
Tie to vision/mission
Set goals, not actions
Track progress and give feedback
Ensure resources
Remove obstacles.
Defining Job Performance Criteria:
Behavior and Results
Results
• Examples: Number of cases won/lost, monthly sales
Behaviors
Behavior
• Examples: Communicating in a professional manner, following through
on customer requests
Poor Results
Great Behavior
Great Results
Great Behavior
Poor Results
Poor Behavior
Great Results
Poor Behavior
Results
Using Multiple Methods to Assess
Behavior and Results
• Objective assessment: Uses impartial performance outcomes
• Subjective assessment: Involves human judgments of performance
• Absolute subjective assessment = comparing an employee’s
performance to that of a “model” standard
• Graphic Rating Scale: Manager rates the extent to which an employee
demonstrates a behavior on a graduated scale.
• Behaviorally anchored rating scale (BARS): Similar to graphic rating scale, but
each point on the scale is “anchored” by a behavioral example.
• Relative subjective assessment = comparing an employee’s
performance with another employee’s performance
• Ranking: List employees from best to worst
• Forced Distribution: Establish predetermined categories to place employees in
– only a certain percent of employees can fall into each category
Using Multiple Sources of Data or People





Observe behavior over time
Take notes
Ask for customer and peer feedback
Allow for self-evaluation
Monitor common errors
• 360 Degree Assessment
Common Errors in
Observing Performance
Manager’s Error
What it Means
Technique to Correct
Halo Effect
Judging all aspects of behavior or
traits on the basis of a single trait or
behavior
Use multiple raters
Lenience or Severity
Consistently rating employees as all
high or all low performers
Use multiple raters; use
relative assessment
techniques
Central Tendency
Consistently rating all employees as
average
Use relative assessment
techniques
Recency or Primacy
Evaluating employees on only the
most recent or initial performance
Use frequent evaluations; take
notes on behavior over the
rating period
Similarity or contrast
Rating people high or low depending
on how similar they are to the rater
Train raters to correct for bias
Providing Effective Feedback
• Principles of Good Feedback
• Be specific
• Focus on the problem rather than the person
• Maximize absolute feedback, minimize relative
feedback and comparisons to others
• Avoid absolutes (e.g., “you always/never …”)
• Be timely
• Focus on the future
• Include information for improvement
• Steps of an Effective Feedback
1. State the behavior you observed
2. Discuss the impact on self or others
3. Provide information for improvement or explore
improvement with the employee
7-10
Example
• BAD: You are very disrespectful!
• BETTER: Yesterday afternoon in our budget meeting
I tried to make a few comments about next year’s
budget. When I did, you interrupted me and spoke
over me. As a result, I did not get a chance to get
my point of view across. It led me to believe that
you don’t respect my opinions and I stopped
contributing. Please allow others to finish their
points before making your own statement.
How to receive feedback
• SS : surprised, shock
•A
A : angry, ashamed, awful
• R : rationalize, rebel, reframe
• A : acceptance, accountable
• H : help, humility, humble
• Listen closely and focus on learning
• Don’t just think about what the feedback says, but
what motivated them to say it?
• Overcome the urge to be defensive
Recognition and Reinforcement:
Managing the Star
o Star = An employee who consistently performs
o
beyond expectations
Despite being good performers, stars are not
necessarily easy to manage
1.
2.
3.
4.
Stars may possess an overdeveloped sense of entitlement
Star performance may be a function of external rewards and not
intrinsic motivation
Many stars have difficulty seeing the contribution others make to
their own success and can alienate coworkers and clients
Managers allocate more resources toward problem employees
eliminating opportunities for stars to grow and develop
Engaging the Star Performer
• A common mistake is to leave the star employee
alone
• Managers need to be involved in creating
challenging job assignments for stars





Transitional
Change oriented
High level of responsibility
Non-authority relationships
Obstacles
Coaching for Success
• Coaching: help people to build their capacity to
develop and solve their own problems more
effectively
• Expert coaching: give advice and instructions
• Consultative coaching: asking questions to help the
employee explore alternatives and challenge
assumptions
• Mentoring: intense, long-term relationship with a
senior, more experienced person for overall
development
Session 10 Study questions:
Please read HCO p.124-159 and answer the following questions:
1. When we are talking about performance management, what are the two major components of
performance management? What is the difference between effectiveness and efficiency? What
is organizational citizenship behavior (OCB) and why do we measure it in performance
management?
2. Please be prepared to explain the following job attitudes: withdrawal behaviors; job satisfaction;
three types of organizational commitment; organizational cynicism.
3. What are the two aspects that needs to be considered when defining job performance?
4. The textbook discussed several different ways of assessing employee performance. What are
they? What are their differences? What are the advantages and disadvantages of absolute v.s.
relative assessment method? In your opinion, how and when to use absolute and relative
assessment method, and why?
5. How to give effective feedback? What are principles of good feedback and what are the three
steps of giving an effective feedback?
6. How to engage star employees?
7. What’s the best way to coach employees? What’s the difference between coaching and
mentoring?
Human Capital in Organizations
BADM 3103
Management Department
GEORGE WASHINGTON UNIVERSITY
MANAGEMENT
create
create, mheducation.com
“sm
294
Human Capital in Organizations
KNOWING
DOING
After reading this chapter, you should be able to:
‘If you do not manage culture, it
manages you, and you may not
even be aware of the extent to
which this is happening”
—Edgar Sheln,
MIT professor
446
KO 13-1 Articulate how organizational cul­
tures differ.
DO 13-1 Assess an organization’s culture in
relation to your own personal fit.
KO 13-2 Recognize the key factors involved
in structuring an organization.
D013-2 Act in ways that facilitate rapid
acclimation and socialization in a
new context.
KO 13-3 Describe the importance of inclu­
sive cultures to managers and
organizations.
KO 13-4 Understand the select dimensions
of people-first cultures that have
been linked to high performance.
D013-3 Improve the productivity of a
diverse team.
D013-4 Influence the cultural practices
that are linked to healthy and highperformance outcomes.
Managing Organizational Behavior: What Great Managers Know and Do, Second Edition
Case: Zappos and Their “Quit
Offer”
ony Hsieh, CEO of billiondollar
e-tailer
Zappos,
is relentless in pursuing
the ultimate experience for his
customers.
Included
among
Zappos’ customer experience
strategies are fast free shipping
and a standing offer to cover
any return shipping if a cus­
the company’s culture, strategy, and
gas money? Doesn’t it seem silly
tomer is dissatisfied for any reason
processes. Then, about one week
at any time. Service representatives
after completion of the program,
and wasteful to induce people to
quit who have already completed
are given great leeway to make sure
Zappos makes the “offer,” telling
your training program?
every customer is an enthusiastic cus­
newbies, “If you quit today, we will
tomer. Thank-you notes to custom­
pay you for the amount of time you
about
ers are common and the company
have worked, plus a $3,000 bonus.”
their jobs and organization? Why
folklore even includes an anecdote
In a BusinessWeek interview, Tony
do so few people ultimately take
about a service representative who
Hsieh reported that only 2 to 3 per­
the offer?
sent flowers to a customer whose
cent of people ultimately take the
mother had recently died.
offer. The other 97 percent say no
3. Critique the following statement
from Tony Hsieh: “If you really
deal—and choose the job over the
want to amaze your customers,
But even in light of Zappos’ cus­
tomer service obsession, one practice
is particularly bold and provocative—
it’s known as the “quit offer.” When
Zappos hires new employees, it puts
them through an intensive four-week
2. What does the quit offer say
Zappos’
confidence
in
instant cash.
a great way to start is to amaze
1. What is the underlying logic of
your employees.”
the Zappos quit offer? Won’t it
4. How might the quit offer give
be abused by people who apply
Zappos a business advantage
for a job there just to get some
over competitors?
training program, immersing them in
‘■’J
a-;.’.
447
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Human Capital in Organizations
MANAGE
1. Will I Fit In Here? Decoding an Organization’s Culture
Two of the most central lessons of organizational culture are that (1) different companies have very different cultures and
subcultures, and (2) the fit between a person and the culture is a critical factor in determining job success and satisfaction.
With that in mind, assume you have just received two job offers and both firms have offered the same pay, same job descrip­
tion, and same geographic location. So your hope is to begin to sort out which of those firms would be the best fit for you.
What types of culture differences are most important in organizations? What questions would you ask? What would be the
sources of information (systems, signs, traditions) you would seek to help determine the nature of each culture, and your
potential fit?
2. Avoiding Culture Shock
You are very aware that fitting in and acclimating to a culture are critical to job success and satisfaction. In contrast, slow
assimilation and “culture shock” are associated with slow advancement and derailed careers. You are the manager of an excit­
ing new international branch of your firm in Seoul, South Korea. Given that you want your new people to assimilate quickly,
get a fast start in their jobs, and jump-start their careers in the firm, what general strategies and specific actions will you take?
Failures in this type of situation are very common, so where do you suspect most managers go wrong? Be specific in isolating
a couple of the most important “must dos” and a couple of the taboos or “don’t dos.”
3. Making a Culturally Diverse Team Productive
You have just been honored by being appointed to one of three project action teams, chartered by your company’s senior
leadership officers, to work on a current strategic issue in the firm. You have been asked to complete your work in three
months and make a presentation at the top management retreat in front of the CEO, the vice president of marketing,
and other decision-makers. Your team’s charge is to explore how your firm might better recruit the best young talent
worldwide. The team is composed of eight people from across the company and is the most diverse team you have ever
been on.
More specifically, the team consists of six men and two women; an age range of 24 to 62; three American Caucasians, one
African American, one Hispanic American, and one national representative from each company unit in India, China, and Brazil,
all of whom are currently on assignment in the United States. Everyone speaks English, although the Chinese woman seems
exceedingly shy and not particularly comfortable with her language skills.
Recognizing it is demanding enough to achieve quality team outcomes with people you know well and understand, you
are concerned it’s going to be very difficult to pull this group together quickly, communicate effectively, and achieve the
kind of work product you will want to present in three months. So what would you recommend that could help bring this
team together? How would you attempt to minimize some of the communication and coordination challenges known to face
diverse teams? Conversely, how might you best bring out the potential creativity and idea generation that is the promise of
diversity? In short, what could you do to help create a productive and diversity-friendly team?
4. Building Your Own High-Performance Subculture
One of the most misunderstood and yet exciting research findings regarding culture concerns subcultures. Specifically,
research has found that the cultural variance within companies (for example, between different McDonald’s stores) is often as
great as or greater than that between companies (McDonald’s vs. Burger King). The same holds for different chapters of non­
profit organizations, for individual churches in a national denomination, and for the same government function (for example,
property assessment) in different city or county locations. What is exciting about this is that it suggests an overall company or
top-down culture is not destiny and, in fact, individual subcultures exist and are greatly subject to the influence of the manag­
ers and workforce within a unit.
With that in mind, assume you work for one branch of a landscaping firm that has six branches in your state. Each branch
has roughly the same annual revenue, organizational/cost structure, and retail presence, and all brand and marketing expen­
ditures are handled at the corporate level. As a young and energetic go-getter, you would really like to make your branch the
top performer in the state. So where do you start? Given that your branch seems almost identical to the other five branches,
is there really anything you can do that would have much impact? What are the things that impact high-performance cul­
tures and what levers to change them are available to you? In what ways would you seek to differentiate yourself from the
other branches and why? What elements, if any, of high-performance cultures from well-known firms (for example, Starbucks,
Google, SAS) would you try to emulate and how could those elements be adapted to fit this landscape business?
Managing Organizational Behavior; What Great Managers Know and Do, Second Edition
CHAPTER 13
Culture and Diversity
MYTHS 13.1

449
Myths of Culture and Diversity
All companies in certain industries or product categories are culturally similar.
Most people would be quick to recognize this as a myth but would still grossly
underestimate just how great the cultural divide is between firms. Firms vary
dramatically in their cultures and learning, so to recognize and assess such
differences is an important skill.

Some people are Just better at fitting in. Like many myths, there is some truth in
this statement. Personality differences in people are real and can certainly influence
the ability and motivation to acclimate. Nonetheless, successful socialization and
effective on-boarding are far more related to what you do (behavioral actions) than
who you are (your personality profile).

New employees are lost initially and then within a few months are well
socialized. Many managers assume that when people are hired, they will have a
brief period of getting socialized and then that process will be over. Evidence,
however, suggests that this is not the case and that it takes from nine months to a
year just to get back to where the person was in his or her first week.

The best inclusiveness strategy is to be “blind” to all differences. This is
often characterized as a noble and nondiscriminating strategy and yet is actually
nonsense. The objective reality is that people do differ in many meaningful ways and

our goal should be to recognize and effectively utilize those differences, rather than
engage in a futile attempt to dismiss or ignore them.
i
………………………………………………………………………………………………………………………………………………………………………….i

Organizations have one culture. While there can certainly be dominant values
and patterns of behavior in firms, the exciting reality is that it is organizational
i
subcultures that are often most influential in firms. That means that effective leaders
and individual contributors can and do have significant impact on the subculture of
their particular organization unit.
……………………………………………………………………………………………………. .

Organization culture Is a strictly positive phenomenon. Oh, do we wish this were
true (and not a myth). Unfortunately, there is an all-too-common “dark” side of
i
culture, whereby toxic, non-inclusive, and low-performance norms prevail in many
organizations. VVorse yet, there are companies where the cultures reward unethical,
discriminatory, and immoral behavior. Culture is exceptionally powerful and can
influence dysfunctional and evil action just as it can foster high performance and
ethical practice.

297
Our group identities define us. This is one of the most pervasive and destructive
myths and is also known by a fancy name: “the ecological fallacy.” Put simply, it
is nonsense to say that all women, or all Asians, or all senior citizens share all the
same characteristics—yet such stereotypical assumptions are common and insidious.
Although some general shared patterns and characteristics are known, and can
be very useful as starting points in working with diverse groups, a good maxim is
to always judge people as individuals and not solely on the basis of their group
identities.
Introduction
One of the textbook authors once worked in a large, Fortune 500 organization
where people had a unique way of talking to each other. In fact, if an employee
didn’t speak this way, he or she might be seen by others as not fitting in. What
was this way of speaking? Well, put simply, it was the use of extensive expletives.
That’s right, in this organization using expletives was a way of showing that you
298
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Human Capital in Organizations
PART THREE Group and Organizational Skills
were tough, that you’ve been around the block, that you could handle things on
your own, that you wouldn’t crumble under pressure. Most importantly, it was a
symbol that you were “one of the gang.” When explaining such a phenomenon,
you’d probably describe this way of behaving as part of the organization s cul­
ture. Organization culture represents a shared way of being, acting, and inter­
preting life in the company. You can’t touch or feel this culture per se, but you
certainly know it exists. Further, you will have probably heard stories about how
this culture came to be like this. For example, this organization was originally
founded by a blue-collar, “rough and tumble” fellow who prided himself on his
aggressive tactics. He valued peoples’ “straight talk” and didnt have much toler­
ance tor formalized or overly complicated ways of speaking. His values regarding
how people should speak to one another have remained in place even as the orga­
nization grew from a family business to a publically traded corporation.
Interestingly, although this aspect of their culture is pervasive, it doesn t nec­
essarily mean that it is related to the organization’s success. Herein is the difficult
paradox ot managing organizational culture: The very things that make a place
unique may not necessarily be the things that make the organization successful.
In this chapter, we try to help you understand the nature of organizational cul­
ture, how it develops and is reinforced. At the same time, we hope to offer you a
perspective that culture is not something that is simply historical in nature, but
rather an area that must be managed with care. Although few individual manag­
ers can change a company’s culture alone, managers can build positive cultures
within their own group and hope that their success is contagious beyond their
department or unit.
Ko 13-1
Understanding Culture and Its Importance
in Organizations
When managers talk about culture, they are referring to the values, norms, and
assumptions that influence their ability to make sense of events and guide peo­
ple’s behavior. Some of these elements of culture can be seen, while others exist
in people’s mental models or assumptions (.see Chapter 4) about the organiza­
tion. Edgar Schein in his extensive work on organizational culture describes cul­
ture as a pattern of basic assumptions which have (1) been invented, discovered,
or developed by a given group as it learns to cope with problems of external
adaptation and internal integration; (2) worked well enough to be considered
valid; and (3) have been taught to new members as the correct way to perceive,
think, and feel in relation to those problems. In other words, culture is a way of
being that everyone agrees is important (not by voting, but by acting!) and should
be taught to all members of the organization. In Schein’s model of organizational
culture, he describes the three levels of culture as they would appear to an out­
side observer from the most superficial and visible level to the deepest unobserv­
able level.’ Schein’s model includes (1) artifacts or organizational attributes that
can be observed, felt, and heard as an individual enters a new culture; (2) values
or e.spoused goals, ideals, norms, standards, and moral principles—this is usually
the level that is measured through survey questionnaires; and (3) underlying
assumptions or the phenomena that remain unexplained when insiders are
asked about the values of the organizational culture. According to Schein, the
real essence of organizational culture lies in this third level.
The contents of each level can be seen in Figure 13.1. At the third and deep­
est level, the organization’s tacit assumptions are found. These are the ele­
ments of culture that are unseen and not identified or even realized in everyday
Managing Organizational Behavior: What Great Managers Know and Do, Second Edition
CHAPTER
13
451
Culture and Diversity
• Personal enactment
• Ceremonies and rites
• Stories and rituals
• Symbols
FIGURE 13.1
Schein’s Three Levels
of Culture
• Espoused values
• Enacted values
• Evolve as solution to problem is
connect
repeated over and over again
Source: From E.H. Schein, Organizational Culture and Leader­
ship, Jossey-Bass, 1992, Figure 9. Copyright © 1992. Reprinted
with permission of John Wiley & Sons, Inc.
interactions between organizational members. Additionally, these are the ele­
ments of culture that are often taboo to discuss inside the organization. This
deepest level of culture becomes even more difficult to discern because the very
people who have the experience to understand it best are often so immersed in
the culture over time that it makes the deep level virtually invisible. As one wise
observer once quipped, “People can’t see their organizational culture in the same
way that fish don’t see water.” Culture at this level is the underlying and driving
element of organizational culture that is often missed by most managers and by
most people studying organizational behavior.
Using Schein’s model, understanding organizational behavior that appears
to be counterintuitive or even full of contradictions becomes more possible. For
instance, an organization can use team-oriented standards at the second level of
Schein’s model while simultaneously displaying curiously contradictory behavior
at the third and deepest level of culture. At the surface, organizational rewards
can imply that individual contributions are more valued than teamwork, but at
the deepest level imply a close-knit family sense of team. This insight offers an
understanding of the difficulty that organizational newcomers have when join­
ing a company. The stated values of the organization may say one thing, but the
deep assumptions that are enacted may be quite different. It also explains why
organizational changes are often unsuccessful because the underlying assump­
tions are generally not understood before would-be change agents and many new
managers begin their attempts to make changes.
Based upon Schein’s work, we can begin to understand how cultures survive
and thrive as specific and sometimes elaborate activities are enacted to maintain
the culture that exists. For example, most organizations have ceremonies, rites,
or rituals that serve to preserve culture. Figure 13.2 provides examples of various
organizational rites and their purpose. One particularly important activity is that
of storytelling. Telling stories helps to quickly and poignandy communicate values
the organization seeks to embody. There are common types of stories told in orga­
nizations to communicate broad-level values on a range of issues, including stories
about (1) managers, (2) getting fired, (3) dealing with relocation, (4) career paths
for low-level employc’es, (5) dealing with crises scenarios, and (6) consequences for
breaking rules.^ At McDonald’s, for instance, stories are told about how senior exec­
utives routinely started their careers as line-cooks and they proudly display buttons
exclaiming “Up from Line.” The obvious implication of such a story is to communi­
cate that anyone can “make it” in the organization and that the company promotes
its own. Please see Tool Kit 13.1 for techniques to improve your storytelling skills.
Practice this!
Go to www.baldwin2e.com
300 , j
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Human Capital In Organizations
PART THREE Group and Organizational Skills
FIGURE 13.2
Example Organization­
al Rites
Rites
of Passage
Example
Purpose
To learn and internalize the
Induction and basic
norms and values of the
training (socialization)
organization
of Integration
To build common norms and
Annual office party
values
of Enhancement
of Degradation
To motivate commitment to
Presentation of an annual
norms and values
award
To change or reaffirm norms
Firing a top executive
and values
Making a Cultural Choice: The Competing
Values Model
Although many theoretical models of culture exist, one known as the Competing
Values Model by Quinn,^ has received considerably more attention than others.
Like many models that are both useful and simple, the Competing Values Model
categorizes cultures along two axes (see Figure 13.3). More specifically, one
dimension depicts the degree to which a company values stability and control
versus the degree to which it values flexibility and di-scretion. The other dimen­
sion represents the value placed on internal focus and integration versus the
valuing of an external focus and differentiation. As you can see, the name Com­
peting Values” is a good one for this approach because like many other ideas in
this book, there is a competition between two worthwhile objectives on each
dimension. It is the decisions that the company makes on these major issues that
ultimately determine “what kind of organization” it will be.
MANAGER’S TOOL
Tool Kit 13.1
KIT
Improve Your Storytelling^
As we’ve noted throughout this book, much of effective management requires practice. Learning to engage in
good storytelling is no different. This tool kit gives you some ideas about situations where storytelling can be
practiced and used.
1. Listen to stories and try storytelling yourself. As you hear stories, try to apply the five-step framework. Ask
people to help you improve your own stories by using the framework.
2. Tell stories to others. Find stories in the press, books, novels, and in personal experience. First read a story
to build your comfort level; then retell a story that you’ve read using the five-step storytelling framework.
3. Pair work. Practice telling stories with just one other person.
4. Field work. Start telling stories more frequently to other organizational members, friends, and others.
5. Keep a journal. To have good material, it is important to write down stories that illustrate important points
you would like to make on the job.
6. Consider alternative perspectives. Try thinking through the same story from different perspectives. Con­
sider the boss, the co-worker, the employee, and the customer as important perspectives to take.
Managing Organizational Behavior: What Great Managers Know and Do, Second Edition
CHAPTER 13
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Culture and Diversity
FIGURE 13.3
The Competing Values
Model of Culture
Flexibility, Discretion, Dynamism
i
Clan
Adhocracy
Internal Focus,
Integration, and
External Focus,
4
>>
Unity
Differentiation,
and Rivalry
Market
Hierarchy
1
r
Stability, Order, Control
Keep in mind that like so many other areas, the Competing Values Model
is not suggesting that there is a “correct” decision on either of these axes. To
the contrary, the goals of stability and flexibility are both laudable ones—as are
the goals of internal and external foci. The problem is you cannot have it both
ways; the reality is that by choosing one we tend to lose the advantages of the
other. In other words, to create stability, a company will generally have central­
ized decision making and a deliberate way of doing things. These companies
tend to have more policies, and be more formalized. Once a company has opted
for stability, this creates significant hurdles when it tries to be flexible and nimble
in responding during times of change. Even more insidious in many ways is that
the very issues that help define the company, and that may be responsible for
its significant success, may ultimately make it unable to compete in a different
environment.
An example of this can be seen in General Motors. By almost any measure.
General Motors was the most successful for-profit organization on the planet.
It reigned supreme for the better part of 50 years, and former U.S. Secretary of
Defense Charles Erwin Wilson once remarked, “What is good for General Motors
is good for the United States.” General Motors, for many reasons, had a culture
that valued stability. This was completely appropriate when the auto industry
was basically controlled by a few large global companies and General Motors
was the biggest of them. The rise of global competition, however, significantly
changed the environment, and General Motors was forced into bankruptcy reor­
ganization in 2009 (now General Motors has been reorganized as a smaller, more
flexible company to try to compete in the very competitive global auto industry
of the 21st century).
From the two competing values in the Competing Values Model, four differ­
ent organizational cultures can be derived. These four cultures are referred to
as clans, hierarchies, adhocracies, and market cultures. We will explain each of
these cultures in more detail in the following.
In a clan culture, there is a strong value placed upon flexibility and an
internal focus of the organization. These organizations tend to be friendly places
to work with a high degree of individual development. As a result, leaders play
developmental roles and are more likely to fill the role of mentor or coach rather
than task master. Most promotion occurs from within the organization because
the company has spent a great deal of time and effort developing their next gen­
eration of leaders. In these cultures, long tenures are relatively typical and orga­
nizational commitment and loyalty are high.
Clan.
Hierarchy. In a hierarchical culture, there is a high value placed on stability
and control with an internal focus. Compared to the other cultures, increased
Human Capital in Organizations
PART THREE
Group and Organizational Skills
formalization tends to be the rule. The leadership role in a hierarchy consists
primarily of organizing, monitoring, measuring, and evaluating the activities of
subordinates. In these types of cultures, the financial and production functions
tend to be relatively powerful because the roles they fill are highly valued and
central to the organization’s standards of success.
Market. In a market culture, there is high value placed on control and stability,
with a focus outside of the organization. This outside focus means that the com­
pany is directed toward competing in their market segments and the leadership
of these companies tends to use strict measures of performance (for example,
performance quotas) to control subordinate behavior. In a market culture, an
employee’s current contribution or performance is the most important factor for
employee payment or promotion. As a result, market cultures can be difficult
places to work for some, but they tend to be places where driven, competitive
people thrive (see the discussion of topgrading in Chapter 7 for a further descrip­
tion of practices that are common in a market culture).
In an adhocracy culture, flexibility is valued and the focus is out­
side of the company. As a result, we have the opposite of a hierarchy-based cul­
ture. The role of the leadership team is more of an entrepreneurial role than one
of controlling. The company’s entrepreneurial focus is externally directed and the
company is in constant competition to be the first one to market, with the most
innovative ideas. In an adhocracy, risk taking is encouraged and innovation is
valued. While certain people thrive in adhocracies, others may have a great deal
of difficulty adapting to the uncertainty and fast pace. These tend to be relatively
intense places to work, with top leaders who are often considered “visionary.”
Adhocracy.
An Alternative View of Culture
Another simpler way of looking at organizational culture is to view it as a group’s
general reaction to stimulus consistent with the basic tenants of learning theory
(see Chapter 6) and the behaviorist approach. Although this is a significant sim­
plification, the work of behaviorists is rooted in the tradition of B. F. Skinner
and looks to the consequences of behavior to understand why certain behaviors
occur. In understanding culture, behaviorists view an organization’s culture as
the manifestation of the company’s reward system.’’ From this view, an organi­
zational culture is a group of people who have been trained, or who have simply
learned from those around them, how to act in any given situation. In this way,
corporate culture functions just as any social learning does. In many ways, this
simple interpretation is very powerful and can help us understand the Quinn
Competing Values Model even more deeply.
Linking values and reward systems is not a difficult task. In fact, if we value
something, we tend to reward it. From the behavior of dogs (for instance, I give
my dog a treat when he rolls over because I value obedience to my command),
to children (for example, when my child says something funny, I laugh because
I value humor in my child), to employees (for instance, our employees get sales
bonuses for making their sales quotas because I value sales and the revenues
they generate), the linking of values and rewards is both common and powerful.
In taking a more or less behaviorist view of culture, Kerr and Slocum pre­
sented an interpretation of culture where they saw the clan and market cultures
above as being at opposite ends of the continuum about what is valued and
rewarded.^ Basically, they described the market culture as a culture that values
performance, whereas the clan culture values loyalty. In looking at the charac­
teristics of the two cultures, this is a compelling logic and one that makes the
management of the cultures and any attempt to change cultures much more
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straightforward. Using a behaviorist view of culture, we need to change the
reward system if we are going to change the culture. It is that simple (though
doing this is not easy). From a behaviorist’s view, trying to change culture with­
out changing the reward system is an absolutely futile exercise that will end in
failure.
is One Type of Culture the Best?
At this point, most students have a rather obvious question in mind: “This is all
very nice, but which culture is best? Which will lead to being most successful?”
Like so many other issues discussed in this book, that question is actually akin
to asking “What language is best?” or from a doctors perspective “What’s the
best way to heal a patient?” Luckily, there is some pretty good evidence to help
us structure a usable answer to this question. In a very interesting and impact­
ful study, researchers examined a large number of companies, and then classi­
fied their cultures, and measured their performance. What they found was that
there is not a best culture, but that the best culture depends on the structural
characteristics of the industry in which the company competes.^ In other words,
what is needed is a match between the culture of the company and the type of
industry in which the company competes. In their study, clans enjoyed superior
performance when the industry was relatively stable and the barriers to entry
were high (for example, cars, steel, and airlines). In these situations, the more
clan-based cultures outperformed the more market-like cultures. In situations
where the industry was engaged in more dynamic competition and where barri­
ers to entry were low (such as web development, distributors, and professional
service firms), companies with market cultures outperformed the more clan-like
cultures.
Another issue to consider when trying to determine an appropriate culture
is the complicating factor that almost no company is a “pure form” of any of the
cultures described earlier. In other words, even companies that value external
focus certainly still place some value on internal issues. Similarly, companies
that value flexibility always have some practices that promote stability. The rea­
son for this can be thought of as an effort to “hedge your bets.” In other words, if
you rewarded nothing but individual performance, you could easily run the risk
of losing effective people who had been with the company for years but had a
short-term .setback.
From the preceding discussions, it is evident that culture impacts the behav­
iors of everyone in the organization—from the CEO to the new building main­
tenance guy. In some cases, however, the effects of culture on behavior are
relatively weak, while in other cases they are extremely strong.* This leads us
to the idea of strong and weak cultures. In a weak culture, there is a great deal
of variance in the way people think and behave within the organization. In very
strong cultures, this variance is much less. The idea of a subculture is a telling
signal regarding a culture’s overall strength.
Organizational Structure: A Key Cultural
Ingredient
Inseparable from an organization’s culture is its structure. Although there are many
elaborate organizational structures being used today, the main concepts behind
an organization’s structure are relatively simple. Organizational structure can
best be defined as the work roles and authority relationships in an organization.
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These roles and relationships are particularly relevant in the field of organiza­
tional behavior because they have important effects on the behavior of individu­
als, teams, and the actions of the entire organization. When many people think of
organizational structure, however, the first thing that comes to mind is the orga­
nization’s hierarchy, which is graphically represented in an organizational chart.
Three primary characteristics of organizational structure are the concepts of span
of control, height, and departmentation.
When thinking about an organizational structure, the managers span of
control is the number of people that report directly to a single manager. So,
in the case of a small retail store with 10 employees and one store manager,
the store manager’s span of control would be 10. While this may not seem like
a very important consideration when thinking of a small retail store, the span
of control becomes a major structural issue when larger organizations are the
focus. In fact, the height of an organization, which is the number of hier­
archical levels in an organization, is often determined by the span of control
of the management members. At first glance, many students might think that
the difference between five people reporting to a manager and seven people
reporting to a manager is not that significant (it’s only two people after all). In
practice, however, increasing the span of control usually allows an organiza­
tion to reduce the number of managers required and maintain a relatively flat
or shorter organizational height. Thus, the span of control and the height of
an organization are often inversely related, meaning that a small span is likely
related to a taller organization height and a large span to a shorter organization
height.
In addition to span of control and height, the form of departmentation a
company chooses is another primary characteristic of an organization’s struc­
ture. Departmentation refers to the grouping of resources (including people
and technology) into work units. The most common forms of departmenta­
tion include organizing by function, by geography, by customer, by product,
and hybrids of these four. Tool Kit 13.2 provides a quick guide to the most
common forms of departmentation and the circumstances that best dictate
their use.
Structure Influences Behavior
Many eager managers fall prey to a simple managerial trap when thinking about
how best to structure their department. The trap is that they fail to realize that
structure influences behavior. In 1971, Phillip Zimbardo, a Stanford Univer­
sity psychologist, conducted a now classic study known as the Stanford Prison
Experiment.’^ Zimbardo and his team of researchers recruited 24 undergradu­
ate students for the study who were randomly assigned to role play the part of
either a prison guard or prisoner. The researchers created a simulated prison
in the basement of the Stanford psychology building and even staged mock
arrests at the participants’ homes! Within one day of the experiment starting,
the new “prisoners” endured humiliating treatment from the guards, and these
newly appointed guards (who just 24 hours before were typical college under­
graduates) developed an almost sadistic approach to dealing with the prison­
ers. On the second day of the experiment, a riot erupted. The guards voluntarily
worked overtime and attacked the prisoners with fire extinguishers without the
re.searchers’ approval. Guards began to use physical punishment such as forc­
ing endless pushups, removing prisoner mattresses, or prohibiting prisoners
to urinate in a bathroom. Prisoners were only allowed to be addressed by their
prison identification number (which they had to memorize and repeat con­
stantly). The experiment became so out of hand that by day six, the researchers
called it off.
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^ MANAGER’S TOOL
Tool Kit 13.2
KIT
Selecting Appropriate Organizational Forms
Organizational
Form
Description
Use
Functional


Departments staffed
by a specialist in

Unit

The environment is

Promotes skill specialization

Reduces the duplication of
organization is small to
function (for example,
medium-sized, routine
accountants work in
technology is used,
accounting)
and goal is efficiency
Also known as Divisional
Key Advantages
stable or certain, the
an organizational
Self-Contained
When

The environment is
resources

large departments

rather unstable, the
or Product, groups
activities on the basis
organization is large
of products, services,
in size, technological
customers, or geography
Fosters an overall outcome and
client focus

Allows for skill expansion and
training
independence is high,
goals are product
Promotes clear career ladders in

specialization and
Promotes delegation of authority
and responsibility
innovation

Matrix

Groups people by
function for a specific

The environment

requires dual focus on
Heightens work involvement
Specialized functional knowledge
is readily available
project, product, or line
product demands or
of business
technical specialization,

pressure for fast

information processing,
Highly flexible—rapid response
Maximizes coordination and
communication
and pressure for shared
resources

Provides legitimate mechanisms
for multiple sources of power
What is so fascinating about this study is that neither the prisoners nor
the guards were given instructions on how to act. Yet, within hours of being
assigned their roles, they acted according to their role—keep in mind these were
normal, well-adjusted undergraduates. Although there are many things to learn
from this experiment, one critical takeaway is the simple yet important idea:
Structure influences behavior—put people in prisons and they will act like pris­
oners. In other words, situations (not people) often dictate behavior, and it’s
a fallacy to believe that people can accomplish goals regardless of their situ­
ational constraints. We are constantly amazed at the number of organizations
that want nothing more than to have their frontline employees serve customers
with delight. Yet their behavior is restricted by a structure consisting of end­
less .series of red-tape approvals and “sign-offs” anytime they want to appease
a customer. The reason that Ritz-Carlton is a model of customer service is that
every employee has the ability and the obligation to satisfy the customer. Ritz
employees are given funds to make this happen and can, at their own discretion,
allocate those funds to a particular customer situation. Thus, for the Ritz to meet
its goals of customer loyalty and satisfaction, they realized they had to stmcture
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employees’ work by pushing much of the day-to-day decision making to lowerlevel employees. Conversely, if an organization has a strong need for safe opera­
tions (for example, a nuclear power plant), then acting like the Rilz is not likely
to accomplish their goals. Instead, they ought to opt for intense monitoring and
smaller spans of control.
The point is, in creating a desired organizational culture, you must align the
structure of people’s work with the mission, goals, and strategy you are trying to
achieve. This point is too easy to overlook as companies often simply copy their
competitors’ structure or structure work in accordance with what is most expe­
dient. An easy rule applies here: First decide what it is you’re trying to achieve
and then create the structure that allows people to achieve it. Don’t create the
structure and hope people will be able to work within that structure. Put differ­
ently, all great managers periodically review structure by asking, “What things
stand in the way of my employees achieving their goals?” The answer almost
always contains structural constraints. The good news here is that redesigning
jobs and structuring a department’s work (see Chapter 6) is well within the con­
trol of managers and relatively easy to do.
KO 13-3
DO 13-1
DO 13-2
People Make The Place:
Person-Organization Fit
It’s clear that organizations do differ significantly in their types and strength of
organizational culture. But to talk about differences in organizational culture
is really to talk about differences in the collection of people that make up an
organization. It is the people within the organization, how they act, react, and
feel, that comprise the essence of organizational culture. Thus, one critical factor
in designing and maintaining a productive organizational culture is to examine
the fit between a given person and the organization (that is, everyone else), oth­
erwise known as person-organization fit or P-O fit for short. P-O fit represents
the extent to which a person’s values, personality, and work needs are aligned
with an organization’s culture. Fit would be considered strong when individu­
als’ most important values, for instance, are perceived as being important in the
organization.
The ASA Framework
The concept of P-O fit was bom out of the attraction-selection-attrition (ASA)
framework, which suggests that individuals and organizations are attracted to
each other based on similar values and goals.’®
The idea of the ASA model is a simple yet very powerful one, and it gives us
a useful lens for understanding everything from why a person interviews with a
certain company, to who gets selected in the interviewing process, to who gets
promoted, to ultimately who leaves the firm on either voluntary or involuntary
bases. The basic ASA model argues that people are attracted to organizations
that appear to have the same personal values as they have, people who are most
like the current culture are selected, and those who do not ultimately share the
same values and standards as the organization eventually attrition out of the
organization. A brief example of these different stages helps bring the power of
the ASA model to light.
Let’s assume we have three different organizations. These three different
organizations for the illustration are Harvard Medical School, the United States
Army, and Google. Would you assume that applicants (that is, people trying to
Managing Organizational Behavior: What Great Managers Know and Do, Second Edition
CHAPTER 13
Culture and Diversity
get in or be hired) to those three organizations are random individuals? In other
words, pick any person you know, or even think about yourself. Is the chance of
applying to those organizations equally likely for your friend (or you)? Of course
not. The applicants for these three organizations are very likely entirely different
groups of people with almost no overlap. This is because the people have selfselected toward organizations that they identify and want to be associated with.
This is the power of attraction. Attraction begins the socialization process before
people are even part of the organization. In the U.S. Army, for instance, most
recruits know what they are getting into. They understand the time commitment
and the dedication that being in the Army will require. People don’t often join
the Army to “see if they like it.” If you find the values and the requirements of
the Army to be similar to your values and skill set, you will consider joining the
Army. If your values and skill set are the exact opposite of the Army’s, it is very
unlikely you would enlist.
In the same way, people are attracted to all different types of organiza­
tions. In college, people join fraternities or sororities if these organizations are
appealing to them. This process continues through the rest of your organiza­
tional life as well. If you are a pre-med student with a strong academic record,
then Harvard Medical School is likely an organization that holds great interest
for you. But for most people. Harvard Medical School is not an organization to
which they are attracted because they have different interests, values, and skill
sets that are not good matches with Harvard’s medical school.
The next step of the ASA model, selection, acts to further refine the ini­
tial group of applicants. So Google starts with a large group of smart, moti­
vated, technically minded people, and then has to select a small portion of
those people to become Nooglers (the term for new Google employees). From
Chapter 12, the two goals of the selection process are to pick people who will
be high performers but who will also fit with the culture. So, from the initial
pool of very smart people, Google is able to pick the people who they think will
fit in best. Now ask yourself a simple question: “Is someone who fits in likely
to be similar to other people in the organization?” Of course they are. So, from
the initial group, Google will then pick people who tend to be like the other
people at Google. Mind you, this is not specific to any one organization, but it
happens in all organizations whether or not people are aware of it while it is
happening.
The last step of the ASA process is referred to as attrition. Over time, cer­
tain people will perform well, fit in, be rewarded, and likely be promoted. Other
people will have a harder time fitting in with others, not building positive rela­
tionships with bosses (recall the LMX relationships discussed in Chapter 9) and
subordinates, and not being valued and rewarded by the organization. Be it
through voluntary (for example, a person looks for another job because she is
unhappy where she is) or involuntary (for instance, she is fired) means, these
people will tend to leave the organization over time.
So the ASA model helps us understand the process of how organizations
create cultures through employees’ evaluations of P-0 fit. The punch line here
is that when employees perceive a strong P-0 fit, they are much more likely
to be satisfied on the job, display increased commitment to the organization,
and are far more likely to stay with the organization for the long term. Fur­
ther, meta-analytic research shows that a strong P-0 fit is related to increased
displays of organizational citizenship behaviors.” Yet P-0 fit is not associated
with increased employee performance and it’s important not to confuse the two.
People may be a terrible fit for the organization but may still, in fact, perform
quite well. Over time, however, the research on P-0 fit would suggest that despite
performing well, employees who feel like they are a mismatch for the organiza­
tion are likely to eventually look elsewhere for employment. In Tool Kit 13.3, we
Human Capital in Organizations
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PART THREE
Group and Organizational Skills
MANAGER’S TOOL
Tool Kit 13.3
KIT
Determining P-O Fit by Decoding Cultural Characteristics
Let’s say you are in the final stages of considering multiple job offers and you’re trying to determine how well you
might fit in. The following are broad categories or characteristics of organizations that will help you determine the
organization’s culture. For example, you should ask people you meet with about the degree to which the orga­
nization encourages risk taking or is inclusive. These characteristics also provide a good platform to describe the
company to others, particularly newcomers.
• Innovation and risk taking. The degree to which employees are encouraged to be innovative and take
risks.
• Attention to detail. The degree to which employees are expected to exhibit precision, analysis, and
attention to detail.
• Outcome orientation. The degree to which management focuses on results or outcomes rather than on
the techniques and processes used to achieve those outcomes.
• People orientation. The degree to which management decisions take the employees into
consideration.
• Team orientation. The degree to which activities are organized around teams rather than individuals.
• Aggressiveness. The degree to which people are aggressive and competitive rather than easygoing.
• Stability. The degree to which organizational activities emphasize maintaining the status quo in contrast
to growth.
• Inclusiveness. The degree to which a diverse set of individuals can gain entry, acclimate, and thrive in the
organization.
Each of these characteristics exists on a continuum from low to high. Assessing the organization on these
eight characteristics then gives a composite picture of culture. That picture becomes the basis for determining
your own or others’ person-organization fit.
provide some dimensions that you can use to assess your own P-0 fit within any
organization.
Cultural Adaptation: Socialization
and Onboarding Employees
The strong evidence supporting P-0 fit means that contrary to popular belief,
managers can have an influence on shaping their immediate organizational cul­
ture to create an environment whereby employees feel like they belong. This
active process is known as employee socialization or the process of helping
employees quickly adjust to and reinforce the central values the organization
espouses. When employees join an organization, they are often overwhelmed by
the ambiguity of their job, worried about whether they will be able to succeed,
and concerned about being socially accepted by fellow employees. New employ’
ees must learn to deal with the fact that some of their initial expectations won t
be met (but if they are given a good realistic job preview [or FLIP, discussed in
Chapter 12], fewer unmet expectations will exist in the first place). Further, they
must adjust to routines in the organization for how people communicate with
others. Perhaps most difficult is coping with anxiety about what their manager
expects from them in terms of job contributions. In fact, research has shown that
Managing Organizational Behavior What Great Managers Know and Do, Second Edition
309
461
chapter
13
Culture and Diversity
xnerience moderate levels of self­
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Human Capital in Organizations
462
PART THREE
TABLE 13.1
Group and Organizational Skills
Hofstede’s Cultural Attitudes Profile for 10 Countries
Uncertainty
Long-Term
Country
Distance
Individualism
Masculinity
Avoidance
Orientation
China
H
L
H
M
H
Power
France
H
H
M
H
L
Germany
L
H
H
M
M
Indonesia
H
L
M
L
L
Japan
M
M
H
H
H
Netherlands
L
H
L
M
M
Russia
H
M
L
H
L
United States
L
H
M
L
L
West Africa
H
L
M
M
L
H — top third, M – middle third, L = bottom third among 53 countries and regions for the first four dimensions and
among 23 countries for the fifth.
Source; Based on Geert Hofstede, Gert Jan Hofstede, Michael Minkov,
Edition, McGraw-Hill, 2010. Reprinted with permission of the authors.
Cultures and Organizations, Software of the Mind,
Third Revised
high in power distance; those that dislike and prevent the development of strong
inequities between citizens are low in power distance. Highly industrialized
Western countries tend to score lower in power distance, while developing coun­
tries, particularly those in Latin America, tend to score higher on this measure.
Application: According to Hofstede’s model, in a high-PD country like Malaysia,
!^^l MANAGEMENT LIVE 13.1
Power Distance and Plane Crashes?
In his national bestselling book. Outliers: the Story of Success, Malcolm Gladwell proposed what he calls “The
Ethnic Theory of Plane Crashes.” Gladwell explored two plane crashes—one Colombian (Avianca Flight 52) and
another. South Korean (Korean Air Flight 801)—and how the culture of the pilots perhaps contributed to each
disaster. He focused on how well the pilots communicated with each other and with air traffic control. Poor com­
munication in these examples, he argues, has to do with Geert Hofstede’s concept of power distance (PD)—see
the discussion regarding Table 13.1 earlier. Countries with a high PD generally value being more deferential
toward authority, and thus not contradicting a superior (the U.S. and New Zealand both have a low PD).
Planes are flown safely when the pilot and co-pilot are in open and honest communication. And in cultures
where it is difficult for a junior person to speak openly to a superior, plane crashes are more likely. Gladwell argues
that since both Colombia and South Korea rank toward the top of the power distance spectrum, the subordinate
members of their cockpit crews were unable or unwilling to speak up as assertively as they should have about
safety concerns. Gladwell further delved into the history of Korean Air, which in the 1990s was plagued by a series
of plane crashes. Investigators discovered that when Koreans spoke to each other in Korean they “were trapped
in roles dictated by the heavy weight of their country’s cultural legacy,” which meant they were hesitant to chal­
lenge a superior directly. According to Gladwell, a number of plane crashes were likely related to the existence
of power distance. Fortunately, once Korean Air figured out that their problem was cultural, they fixed it (via pilot
training) and their safety rates are now equivalent to those around the world.
Adapted from http://medicalcenter.wcb.id/category/newt>health; acce«$ed on 2/10/2010.
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CHAPTER 13
Culture and Diversity
463
you would probably send reports only to top management and have closed-door
meetings where only a select few powerful leaders were in attendance.
2. Individualism versus Collectivism. This dimension focuses on the val­
ues that govern relationships between individuals and groups. Countries high
in individualism value individual achievement, freedom, and competition. In
countries high in collectivism, values of group harmony, cohesiveness, and
consensus are very strong, and the importance of cooperation and agreement
is paramount. In collectivist cultures, the group is viewed as more important
than the individual. Japan epitomizes a country dominated by collectivist val­
ues, while the United States is the most-often-mentioned example of an indi­
vidualistic country. Application: Hofstede’s analysis suggests that in the Central
American countries of Panama and Guatemala where the individualism scores
are very low, a marketing campaign that emphasized benefits to the community
or that tied into a popular political movement would likely be understood and
well received.
3. Masculinity versus Femininity Countries that are masculine-oriented value
assertiveness, performance, and success, and are results-oriented. Countries that
are feminine-oriented vtilue warm personal relationships, and service and care
for the weak. People from Japan, for example, tend to be masculine-oriented,
while those from the Netherlands, Sweden, and Denmark tend to be feminineoriented. Application; Japan is highly masculine, whereas Sweden has the lowest
measured value. According to Hofstede’s analysis, if you were to open an office
in Japan, you might have greater success if you appointed a male employee to
lead the team and had a strong male contingent on the team. In Sweden, on the
other hand, you would aim for a team that was balanced in terms of skill rather
than gender.
People from different countries have been found
to differ in their tolerance for uncertainty and their willingness to take risks.
Countries low on uncertainty avoidance are relatively easygoing and comfortable
with ambiguity (such as the United States and Indonesia); they also tend to be
tolerant of differences in what people believe and do. On the other hand, those
high in uncertainty avoidance (such as Japan and France) tend to be more rigid
and intolerant of differences. In high uncertainty avoidance cultures, conformity
to the values of social and work groups to which a person belongs is the norm,
and structured situations are preferred because they provide a sense of security.
Application: Hofstede’s cultural dimensions imply that when discussing a project
with people in Belgium, whose country scored very high on uncertainty avoid­
ance, you should investigate the various options and then present a limited num­
ber of choices, but have very detailed information available on your contingency
and risk plans. Note that there will also be cultural differences between French
and Dutch speakers inside Belgium!
4. Uncertainty Avoidance.
5. Long-Term versus Short-Term Orientation. The last dimension that Hofstede identified concerns whether citizens of a country have a long- or short­
term orientation toward life and work. A long-term orientation (LTO) derives
from values that include saving and persistence in achieving goals. A short-term
orientation (STO) reflects values such as a concern for happiness or stability
and living for the present. Japan and Hong Kong are known for their high rates
of per capita savings; they have long-term orientations. Citizens in the United
States and France, on the other hand, tend to spend more and save less, reflective
of their short-term orientation. Application: According to Hofstede’s analysis.
r
1
connect
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Human Capital in Organizations
464
PART THREE
Group and Organizational Skills
people in the United States and the United Kingdom have low LTO scores. This
suggests that you can pretty much expect anything in this culture in terms of
creative expression and novel ideas. The model implies that people in the U.S.
and UK don’t value tradition as much as many others, and are therefore likely
to be willing to help you execute the most innovative plans as long as they get to
participate fully. This may be surprising to people in the UK, with its associations
of tradition!
One of the most important contributions of Hofstede’s studies regarding
working with diversity in teams is the notion of diversity distance. For example,
a group that consists of Norwegians and Swedes is not as diverse as a group that
consists of Norwegians and Saudis, which in turn is not as diverse as a group
of Norwegians, Saudis, and Americans. Understanding such distance and some
typical patterns of perceptions and motives can be useful as a starting point in
working with team members from diverse cultures.’^
Cultural norms play a large part in the mechanics and interpersonal relation­
ships at work. When you grow up in a culture, you take your norms of behavior
for granted. You don’t have to think about your reactions, preferences, and feel­
ings. When you step into a foreign culture, suddenly things seem different. You
don t know what to do or say. Using Hofstede’s cultural dimensions as a starting
point, you can evaluate your approach, your decisions, and actions based on a
general sense of how the society might think and react to you.
Of course, no society is homogenous, and there will be deviations from the
norms Hofstede found. However, with this as your guide, you won’t be going
in blind. The unknown will be a little less intimidating and you’ll get a muchneeded boost of confidence and security from studying this cultural model.
The beauty ol Hofstede’s work is that beyond its descriptive power, it also
offers a starting point for functioning effectively in diverse contexts. Table 13.2 is
a synthesis of the applications of Hofstede’s findings organized by the five dimen­
sions of national culture differences he identified; also see Management Live 13.2
to think about how Holstede’s work is important in your own situation.
TABLE 13.2
Applications of Hofstede’s Findings for Working with National Cultures^^
High Power Distance
Characteristics
Tips

Centralized companies.

Acknowledge a leader’s power.

Strong hierarchies.

May need to go to the top for answers

Large gaps in compensation,
authority, and respect.
Low Power Distance

Flatter organizations.

Use teamwork.

Supervisors and employees treated

Involve as many people as possible in
as equals.
Characteristics
High Individualism

High valuation of others’ time and
decision making.
Tips

Acknowledge accomplishments.

Don’t ask for too much personal
need for freedom.

An enjoyment of challenges, and
information.
an expectation of rewards for hard
work.

Encourage debate and expression of
own ideas.

Respect for privacy.
Managing Organizational Behavior: What Great Managers Know/ and Do, Second Edition
CHAPTER 13
Culture and Diversity
Low Individualism

Emphasis on mastery and
competence.


465


Work for intrinsic rewards.
Harmony is more important than

Respect traditions and introduce
Characteristics
Tips





Men are mascuiine and women are
There is a well-defined distinction
Be aware that people may expect male
and female roles to be distinct.

Advise men to avoid discussing
between men’s work and women’s
emotions or make emotionally based
work.
decisions or arguments.
Equality between the sexes.

Powerful and successful women are

Avoid an “old boys’ club” mentality.
Ensure job design and practices are not
discriminatory to either gender.
esteemed and respected.

High Uncertainty
Avoidance
Suppress feelings and emotions to
change slowly.
feminine.
Low Mascuiinity
Show respect for age and wisdom.
work in harmony.
honesty.
High Masculinity
Treat men and women equally.
Characteristics
Tips


Very formal business conduct with
Need and expect structure.
Be clear and concise about your
expectations and parameters.
lots of rules and policies.

1

Plan and prepare, communicate often
and early, provide detailed plans, and

Feelings of nervousness spurn high
focus on the tactical aspects of a job or
levels of emotion and expression.

Differences are avoided.
project.

Express your emotions through hand
gestures and raised voice.
Low Uncertainty
Avoidance

Informal business attitude.

Concerned with long-term strategy

Do not impose rules or structure
unnecessarily.
rather than what is happening on a

Minimize your emotional response
by being calm and contemplating
daily basis.
situations before speaking.

Accepting of change and risk.

Express curiosity when you discover
differences.
High Long-Term
Orientation
Characteristics
Tips

Family is the basis of society.

Parents and men have more


women.
Strong work ethic.

High value placed on education

Low Long-Term

Promotion of equality.
Reward perseverance, loyalty, and
commitment.

Avoid doing anything that would cause
another to “lose face.”
and training.
Orientation
Do not display extravagance or act
frivolously.
authority than young people and

Show respect for traditions.

Expect to live by the same standards
and rules you create.

High creativity, individualism.

Treat others as you would like to be
treated.

Be respectful of others.

Do not hesitate to introduce necessary
changes.

Self-actualization is sought.
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PART THREE
Group and Organizational Skills
MANAGEMENT LIVE 13.2
Testing Hofstede’s Findings in Your Own World
Take some time to review Table 13.1 for the various cultural dimensions Hofstede identified. Pay particular atten­
tion to the native countries of those you work with on a day-to-day basis.
In light of these scores, think about some interactions you’ve had with people in other countries. Does your
conversation or association make more sense given this newly found insight? Challenge yourself to learn more
about one culture in particular. If your work brings you in contact with people from another country, use that
country as your point of reference. Apply Hofstede’s scores to what you discover and determine the accuracy and
relevance for you.
The next time you are required to work with a person from a different culture, use Hofstede s scores and make
notes about your approach, what you should be prepared to discuss, and why you feel the way you do. Afterward,
evaluate your performance and do further research and preparation for your next endeavor with that person.
Ko
13-4
Inclusive Cultures
Characteristics of Inclusive Cultures
Inclusiveness is not just an Idea
or a burden it’s a competitive
weepon
—CEO, Fortune 500 Firm
Practice this!
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As noted earlier, inclusion (or lack thereof} is an important dimension of a com­
pany’s culture. While it was once in vogue to speak of managing diversity, that
terminology has rightly given way to the more apt managing for diversity or sim­
ply creating inclusive workplaces. Note that an organization may have diversity
without inclusiveness. The mere presence of a workforce from many national,
ethnic, and generational backgrounds doesn’t necessarily mean that a business
is genuinely inclusive. If the diversity of backgrounds doesn’t impact organiza­
tional assumptions, values, and behaviors, it remains at best a neutral statistic,
and at worst an obstacle to the organization’s cohesiveness and success.
The full creative possibilities and payoff of inclusiveness can only be captured if
it is deliberately practiced in all aspects of organizational life. The cost of anything
less is an organization in which many people are not operating at their full poten­
tial, corporate cohesion is only at a surface level, and a narrow band of approaches
and perspectives is used to address problems and respond to opportunities.
So what is it that makes a culture inclusive? Decoding an organization by
looking at power relations, policies, practices, processes, and daily interactions
can be quite complex, but a few central characteristics stand out.
A Formal Corporate Statement
While it hardly guarantees action, in today’s world the lack of a formal organi­
zational commitment supporting inclusiveness can be seen as conspicuous by
its absence. So make it official. If nothing else, it may prompt some action that
occurs solely out of the desire to not seem hypocritical in having a statement of
inclusion that is ignored or flaunted. Post inclusion statements in company poli­
cies and ensure there is an opportunity for them to be seen and heard by every
organizational member.
An example of a diversity and inclusion statement developed at Coca-Cola
Enterprises is:
Atlrac’ting, developing and retaining a highly talented and diverse worklorce is one of
oni thr ee strategic business pr iorities. To achiete this, we arv committed to creating
Managing Organizational Behavior: What Great Managers Know and Do, Second Edition
CHAPTER 13
Culture and Diversity
an inclusive cultur e—one that welcomes, values, and celebrates a wothforce com­
prising employees of different ages, ethnicities, races, cultuiTes, gender s and sexual
orientations.
Symbols, Rituals, and Stories
Do the symbols, stories, and rituals of the company speak to everyone—or do
they reinforce in-group identities at the expense of others? Do recruitment,
screening, evaluation, career-tracking, and promotion processes genuinely seek
to develop diversity at all levels—or are there blinders that perpetuate stereotypi­
cal roles for different groups of people? Does the company promote after-hours
social interactions and professional networking across cultural, occupational,
and other subgroups—or does inclusiveness exist only in the immediate job and
project context?
Are differing viewpoints and approaches to solving problems encour­
aged—or just the narrow band that fits the prevailing culture of the leadership
or dominant social group? Are the differing strengths of diverse management
styles acknowledged and emulated—or is there a single standard? Are different
employee support needs, expectations, work patterns, and communication styles
accommodated—or is there a one-size-fits-all approach to managing and devel­
oping people? Organizations that are serious about inclusiveness effectively inte­
grate inclusive principles into all aspects of the organization, including designing
structures and practices that support diversity, coordinating marketing efforts
that consistently focus on creating, understanding, and serving diverse mareet
segments, and thoughtfully managing international operations to ensure they
are in compliance with cultural norms and expectations.
Provide Opportunities for Networks and Support
Employee networks are excellent tools to foster inclusion in the wo^place.
While some exceptions make sense, it is usually best to have it so that any
employee (not just those of a targeted identity) can become a member o eac
group—and those outside the target group are particularly encouraged to
allowing them to develop a stronger understanding of the challenges ot er
employees encounter. Networks add more to an employees work expenenci^
fostering communication and relationship building. The information s ^e
in these groups assists management in addressing issues and removing ar
riers to an inclusive workplace. Campbell’s Soup Company in Chicago ma es
particularly good use of networks, including unique networks dedicaW o
African Americans, Asians, Latinos, GLBT, women, and American n lans
Aboriginals.
Carefully Considered and Customized Training Opportunities
Inclusiveness training can be successful or it can be a disaster and there are
many examples of both. To be effective, training needs to be customize to a p
ticular organizational audience and avoid simple lecturing and preac mg a
rather include a variety of training methods—role play, classroom sty e,

and web-based learning. Indeed, some of the most effective inclusiyeness
ing opportunities do not happen in formal classrooms or traditiona e uca
formats. Isolating and addressing diversity flashpoints and subtle signs o ®
siveness (see Management Live 13.3) are examples of such natura y occ
development opportunities.
. „ ^hnoints
As one illustration of how an organization can attack diversity a
and exclusiveness, IBM launched eight executive-led task forces on w
men, African Americans, Hispanics, Asians, Native Americans, gays
ans, and people with disabilities. Ted Childs, vice president for globa wo
467
Human Capital in Organizations
468
PART THREE
Group and Organizational Skills
‘-Ti MANAGEMENT LIVE 13.3
Diversity Flashpoints and Signals of Exclusiveness
One of the most telling signals of an inclusive culture is, perhaps ironically, how exclusiveness is identified and
addressed. Diversity flashpoints are those situations, often subtle but sometimes arresting, where exclusiveness
occurs in organizational contexts, and the “moments of truth” where a truly inclusive culture is created. Typical
examples of diversity flashpoints include statements like:
“That was so gay.”
“No offense, but in this firm that is not really a job for a woman.”
“We need fewer waspy white guys running everything.”
“I am not prejudiced, I have lots of black friends, but I just do not think that black women make good attor­
neys for us.”
“You know that some minority is going to get a token role so it will look good.”
“He strikes me as a bit old to be pushing for that job.”
diversity, explains: “We asked [the task forces] to look at IBM through their con­
stituency and answer, ‘What was required for your group to feel welcome and
valued throughout IBM?’ and ‘What could we do in partnership to maximize your
productivity? How could the company better approach your constituency to influ­
ence your buying decisions?’ The intent was for us to identify anything where
change would make things better We looked at recruiting, mentoring, stereotyp­
The results were rich: The com­
pany is still working to implement all of the recommendations from its task
forces.’*’
Truly inclusive cultures are quick to identify, expose, and discuss such signals
of exclusivity. Developing an inclusive culture requires effort from every member
within an organization. Would you respond, and if so, how would you respond if
you heard one of the preceding statements over lunch in your school or organiza­
tion? Your response (or lack thereof) will be a critical signal of inclusiveness in
your context.
ing, and external agencies we should work with.”
Manager Accountability
Companies that are serious about inclusiveness put their money where their
mouths are, making managers personally accountable and rewarding them for
fostering inclusive cultures. For example, at Carrier Corp., a Syracuse, New Yorkbased heating, air conditioning, and refrigeration firm, business unit presidents
meet quarterly to track their progress in recruiting, retaining, training, and devel­
oping minority and female workers. Their performance in each of these areas is
directly reflected in the presidents’ annual performance bonuses.’^
Top Management Models and Tone Setting
Culture is established and reinforced at the top of an organization, so it is criti­
cal that the most senior managers live and breathe inclusiveness—otherwise,
all other efforts may be weakened or wasted. When top-level executives emu­
late the corporate culture, it’s easier for employees to follow and commit to
317
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CHAPTER 13
Culture and Diversity
469
adopting the inclusive culture themselves. One great example of top-manage­
ment embracing and exhibiting inclusiveness comes from Paul Hogendoom,
president of OES Inc. located in the United Kingdom, whose following quote
illustrates one way that he sets the tone from the top to encourage an inclusive
culture:
When I make the rounds in the morning, I often say good morning in ten different
languages. Of course “good morning” is just about the extent of what 1 am able to
say in many of those languages, but it does put a few smiles on faces, Sometimes it
takes intentionally role-modeling examples to illustrate the point that no one person
is above any specific task, including mynelf. Although specific roles may have differ­
ent values in an organization, as individuals, we are still equal.
The Payoffs from Inclusive Cultures
Tony Bums, former CEO of Ryder Systems, launched inclusiveness initiatives in
his company long before he had any evidence that the initiatives would pay off.
So why did he launch them? “Because it was the right thing to do,” he replies.
Moreover, there are laws that prohibit discrimination made on the basis of “pro­
tected characteristics” that have no relationship to job performance. There are
six broad categories of protected characteristics, including race and color, gender,
religion, national origin, age (over 40), and disabilities, and the laws do demand
that all persons receive the same opportunities for employment—though no laws
require that an employer give preferential treatment to any person or group of
persons because of their protected characteristic.
So there are clearly moral and legal reasons to favor inclusive workplaces.
But the really wonderful news about inclusiveness is that doing the right and
legal thing also happens to be good business. That is, although moral and legal
motives are important in their own right, inclusiveness has also been tied to
revenue growth, profitability, and maximizing resource utilization.’® For exam­
ple, companies rated by “Best Companies for Asians, Blacks, and Hispanics”
by Fortune magazine routinely perform well, beating or matching the S&P 500
each year.”* Simply put, those organizations with inclusive cultures tend to be
superior performers. Making the business case for inclusiveness often refer­
ences metrics that include the following.
Reduction in Absenteeism and Turnover. Research has demonstrated that,
when people perceive themselves as being treated unfairly, they both tend to be
absent more and are more likely to leave the company altogether.^”
Marketing Advantages. Multicultural decision-makers are a competitive
advantage for any organization that wants to provide goods and services to a
multicultural market. McDonald’s restaurants in Israel initially fared poorly
because the company did not understand the importance of serving kosher
food.
On the other hand, there are numerous examples of marketing successes that
can be directly traced to smart and inclusive cultures. Kentucky Fried Chicken
was successful in Israel with kosher chicken, and United Airlines saw a signifi­
cant increase in Hispanic customers when they installed a Spanish-speaking tele­
phone reservation line.^’ Another example of a company that took full advantage
of its diverse workforce is JCPenney. Here, African American members of the
marketing staff knew that many African American women have a tradition of
wearing white dresses to church on the fifth Sunday of the month. Consequently,
the marketing staff created a fashion layout of very attractive churchgoers wear­
ing white dresses from JCPenney, resulting in brisk sales of white dresses in Penney’s top markets.
The time is always right to do
what is right
-Martin Luther King, Jr.
318
470
Human Capital in Organizations
PART THREE
Group and Organizational Skills
Many people from culturally diverse groups prefer
to patronize organizations that have a good track record for inclusiveness. On
the other hand, a reputation for exclusiveness can hurt a company’s sales—for
instance, thousands of Americans boycotted Cracker Barrel restaurants when
company officials admitted to firing a number of employees because they were
gay or lesbian, and hundreds of African Americans switched loyalties from CocaCola to PepsiCo because ot repeated racial discrimination claims against Coke.^^
Company Reputation.
Recruiting Advantages. A company that values inclusiveness expands its
pool of potential applicants; companies that do not have fewer talented work­
ers to choose from. A company’s commitment to diversity sends a message to
members of traditionally disadvantaged groups that they will be welcomed into
the organization and allowed to work to their full potential.^’^ Maria Elena Lagomasino, head of global private banking at Chase, sums it up this way: “If you
become known as a great place for women or Blacks or Asians, you ’ll attract the
talent. They get a sense that they’ll just he much happier in the company—and that’s
Research suggests that a company’s commit­
ment to diversity communicates to recruits that its policies and procedures are
designed to treat all employees fairly, thus making the organization more attrac­
tive as a potential employer.^*
as important as title or money.”^^
DO 13-3
It is never too late
to qive up your
prejudices.
-Henry David Thoteau
Working Productively with Diverse People
and Teams
Working with people very similar to us is tough enough; working with those
who are dissimilar is often even more challenging. For most people, diversity
issues are most pronounced with respect to working in teams. Current research
suggests teams composed of individuals with diverse backgrounds face special
challenges in functioning effectively, but also have potential advantages that
can enhance their performance.^’ Group functioning is made more difficult
because diverse people are less likely to see or understand situations in simi­
lar ways. People from like backgrounds trust each other more readily, while
diversity increases the chance for misperception and confusion in the group
process. Time spent by the group clarifying confusion thus increases the time
needed to achieve outcomes and diminish productivity. Put simply, diversity
makes communicating and reaching agreement within a group more difficult
and time-consuming.
At the same time, diverse teams do also have the potential to achieve bet­
ter outcomes than homogeneous teams because their wider range of human
resources enables them to invent more options and create more solutions. Diver­
sity makes it easier for teams to consider more ideas, avoid groupthink, and
actively attend to fellow team members’ ideas and contributions. Diversity is
most advantageous for teams facing ambiguous and creative tasks. On the other
hand, diversity is most challenging for teams facing implementation-type tasks
that require reliable, fluid, and frequent interaction.
The managerial skill challenge, then, is to find ways to minimize potential
process deficits and harness the potential of diversity to positively influence team
outcomes. The successful diverse team is generally one in which members are
aware of, and open about, important differences, not just surface ones, under­
stand how those differences might influence team process and member engage­
ment, and take explicit action to bring the team together and communicate most
effectively (Figure 13.4).
Managing Organizational Behavior: What Great Managers Knowr and Do, Second Edition
CHAPTER 13
471
Culture and Diversity
Phase 1
Phase 2
Phase 3
AWARENESS—————— ► UNDERSTANDING——————— ►ACTION
FIGURE 13.4
Phases of Success for a
Diverse Team
Consequences of Action bring new Awareness
Building Awareness
Any managerial focus on diversity should stem from the reality that not everyone
is motivated by the same things, nor do they prefer to interact in the same way.
At one level, this reality makes teamwork more difficult. But given both the pro­
ductive potential of diverse teams and their inevitability in todays workforce, it
does little good to worry about that. Rather, a first step in being diversity savvy is
to be aware of the situation, embrace it, and make the most of it.
With respect to diversity awareness, three common traps often befall teams.
One is a tendency to romanticize diversity, whereby any differences are deeme
important and the presumption is that diversity somehow magically leads to Pos­
itive team outcomes. That is nonsense. As noted earlier, the research is cleai t a
diversity generally makes team challenges more demanding and, for some types
of teams and team purposes, will be a detriment rather than an enabler.
A second trap is to deny or ignore important differences and the potentia or
those differences to affect team process and outcomes. Being strict y iversi y
blind” may sound like a fair and high-minded approach but, in reality, is o en a
recipe for team failure. People differ in important ways that impact t eir percep
tions, motivations, and actions on behalf of a team. To neglect that rea i y is
destine teams to fail.
A third trap is that, when most people use the term diversity, they are
talking only about observable or surface-level diversity. Surlace-level d ve
sity refers to differences that are easily seen and generally ven a e via a ‘I
assessment of physical characteristics, including gender, age, race, an
*
origin/ethnicity. However, diversity exists on many levels Indeed, while suna level diversity factors heavily into people’s unique cultura
experience, important diversity also exists below the surface an is
,
ily observed. This type of diversity has been called deep-level diversUy and
reflects differences among people in such areas as attitudes, e le .s

skills, and values.^” This level of diversity can only be understoo y
learn about different perspectives and observing behavior over
prevalent and insidious danger is to assume the surface- e\e
c\
observe is indicative of a deeper-level diversity you cannot o serve
As you might suspect, people who make such assumptions an
cemed with surface-level diversity miss the real under

with deep-level diversity. For example, research has shown ^ ®
j. r
want to form an effective diverse work team should do so on t e
,
rather
relating to differences in skills, personality traits, values, an a
than surface-level characteristics.^
It
This is not to say that attention to surface diversity
^
manv
clearly is a good place to start to ensure equity in the wor p
. pj.g.
cases, a history of exclusion and even discrimination has crea e
exists
sentativeness of certain groups of minorities (for examp e, a ^ ®
create
where few women are in executive positions), and proactive ^
diversity is
a more representative balance are appropriate. However, surface d^ty^is
often treated as a more important indicator of deep-leve iversi ^
diversity
deserves. A key to creating a diversity-friendly te^ is to ‘-^cognize that ciive^^^y
is more than surface or skin deep and that deep-level diversi y is
It is not best that we should all
think alike: It Is difference of opin­
ion that makes horse races
—Mark Twain
320
Human Capital in Organizations
i
472
PART THREE
Group and Organizational Skills
FIGURE 13.5
Surface-Level and
Deep-Level Diversity
productive work environments. For some specific ways to get past surface-level
diversity, see Tool Kit 13.4 and also look at Management Live 13.4 for a good
example of a company’s diversity philosophy.
Tme diversity awareness comes from a willingness to challenge assumptions
and avoid stereotyping. However, it is critical to remember the perceptions and
MANAGER’S TOOL
Tool Kit 13.4
KIT
Getting Underneath Surface Diversity
To know that a person is of a certain race, gender, or ethnic background does not by itself tell us much about that
person’s perceptions, values, or behaviors. However, it clearly does alert us to possible sources of miscommunication. We can then take the opportunity to learn more.
The following list includes several practical strategies for learning more about those who differ from us. Not
surprisingly, the key ingredient to establishing a relationship with people of difference is mutual respect and a
desire for understanding.
• Create informal time together. Invite fellow members to meals—ideally in your home. Show respect for
their culture and language and signal to them that you honestly want to learn about them and their cul­
ture. Ask, “How would I feel if I were in their shoes?”
• Learn how to pronounce names correctly. Their names are as important to them as yours is to you. Prac­
tice saying names until you get close to how they should be pronounced.
• When speaking English to people with limited English skills, do so slowly and clearly. Remember, raising
your voice and speaking louder does not make English more understandable.
• Listen, observe, and ask a lot of questions. A key question might be, “Would you help me understand?”
• Be careful about promises. In English, we express the subjunctive {possibility, probability, or contingency)
in a way that is sometimes misunderstood by internationals.
• Don’t allow cultural differences or preferences to become the basis for criticism and judgments. Differ­
ences are neither good nor bad. What we do with them is the key. Seek and promote any organizational
diversity initiatives (training seminars, mentoring, language seminars) that might help your cause.
Managing Organizational Behavior: What Great Managers Know and Do, Second Edition
CHAPTER 13
Culture and Diversity
i 321
r
473
MANAGEMENT LIVE 13.4
The Diversity Philosophy at Booz Allen Hamilton
A great example of the importance of broadly conceived diversity (that is, both surface- and deep-level) can be
found in the following comments from Tony Mitchell, a managing principal for Booz Allen Hamilton Inc. “As a con­
sulting firm, one of the most important aspects of our ability to support our clients is intellectual capital—or what
we call thought leadership. Diversity comes into play here as diversity o…

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