This essay focuses on the importance of culture and management of culture in terms of organization perspective. This essay will also be focusing on cross-border culture alignment and strategic approach towards it. Hofstede defined culture as acknowledged standards, qualities and practices that push employees to behave accordingly (Hofstede, 1980). This affects everything an organization does, from recruitment-selection to decision-making. Usually, Culture is under-estimated because it is not measurable in terms of tangibility and the perception that it is hard to change. Neglecting culture is a mistake because it holds a strategy together (Hofstede, 2003).The organization should identify desired employee behaviour and align them with the culture. (Martins, Terblanche, 2003).
There are countless management strategic approaches for talent, leadership, and performance, but not culture. Culture has been tricky subject, if not studied and managed carefully can lead to increase costs of cultural mismanagement(Schein, 2017).Increasing globalization market and interdependence across cultures, and the fact that cultural differences are not going away, make it crucial to understand different market segments, different way of doing business and different world views. While some guidelines exist, they are not comprehensive (Schein, 2017). In this essay, there will be a case study on organizational culture and the essay will be analyzing aspects of the case and providing critical analysis of culture and management. Organization that excels at building and strengthening their unique culture with support of delivering desirable performance has constructed a strong “culture foundation” (Schein, 1990).
Background
Lush Ltd. is a multinational cosmetics retailer headquartered the United Kingdom and was established in 2000. Lush is a growing company and has its retail branches in Japan, USA, and Finland. Lush offers natural organic hair and beauty products. Lush is a privately owned company with a diminutive amount of shares available on an invitation basis only. The company’s expansion is based mainly on partnerships. Lush is a professional or bureaucratic organization design. According to Mintzberg, the professional organization is known to be bureaucratic. The vital difference that professional organizations rely on highly trained professionals who take control of their own work. Therefore, while there is a high degree of specialization, decision-making is decentralized. The professional organization design is complex, and there are many rules and procedures. Supporting staff within these organizations usually follow a bureaucratic structure. The clear disadvantage of the professional structure is the lack of control that senior managers can exercise because authority and power are spread down through the hierarchy (Mintzberg, 1989). This can make it hard for the organization to implement change. The CEO leadership of lush can be defined as transactional and visionary leadership across the organization. The CEO decided to; consider aligning its organizational culture across all of its sites of operation. Currently, other than the UK, these are located in the US, Japan, and Finland. The reason behind CEO’s cultural alignment is to gain more control, standardize procedures and regulate it retail branches by aligning the business strategy with culture in order to get the desired results of organizational excellence.
Leadership
Developed by Martin Evans and Robert House, the path-goal theory can be defined as four leadership styles: directive, supportive, participative and achievement-oriented (House, and Mitchell, 1997). This theory assumes leaders engage in all or any leadership style or a combination of style depending on the situation. Today, with the growing diversity in organizations, there is a shift in leadership styles. Transactional leadership can be defined as a managerial approach to leadership. This type of leadership focuses on supervision of organization performance and has more to do with follower compliance. However, transformational leadership goes beyond the cost-benefit exchange of transactional leadership by motivating and inspiring followers to perform beyond expectations. Transformational leadership theories predict follower’s emotional attachment to the organization. (House et al., 1988). The CEO needs to take into consideration what leadership style best suits the organization. Devanna (1990) suggests the change effects leaders can have on organizations as well as on individuals by identifying the need for change, creating a vision and, making a commitment to these visions. Transactional leadership and transformational leadership have related models. Bass (1985) views these as separate dimensions, which would imply that leaders can be both transactional and transformational leaders. He argues that transformational leaders are built on transactional leaders and not vice-versa. Leaders should be sensitive to cultural differences when creating a new culture or aligning culture across-borders. ( Kuada, 2010) . This information, focus on how to help the CEO align leadership with national culture and cross-border configuration in order for the CEO to achieve organizational excellence and control.
National culture and cross-border configuration
Factors for the CEO to consider while structuring culture across-borders alignment; Hofstede developed a model known as the six cultural dimensions model to approach national culture. The dimensions were categorized as Individualism/collectivism (IC), power distance (PD), uncertainty avoidance (UA), masculinity/femininity (MAS), long-term orientation/ short-term orientation (Hofstede, 1984). Hofstede’s six cultural dimensions theory states the structure for cross-border communication. This theory describes the effects cultural values have on members of society, and how these values translate into behaviours, utilizing the structure from the factor analysis (Hofstede & Bond, 1984). Later on, Trompenaars and Hampden-Turner developed a similar kind of model seven dimensions model to manage and understand cross-border cultural differences. The model distinguishes seven cultural dimensions. The dimensions were as follows Individualism-communitarianism, universalism-particularism, neutral versus affective relationships, specific versus diffuse relationships, achievement versus ascription, inner-directed versus outer-directed, sequential versus synchronic (Trompenaars, &Turner, 2015). Hofstede’s definition of culture states that “culture is communal programming of the mind that differentiates the members of one group from another” (Migliore, 2011). Then, this theory collaborated with the classic theory of personality structure and culture. The classic theory suggests that a person is fashioned by the culture. Thus, the people of the same culture will adopt specific collective characteristics and develop a parallel personality structure hence; individuals differ according to different cultures (Cantwell & Verbeke, 2017).
According to Hofstede, cultures have five major dimensions: individualism, masculinity, power distance, and uncertainty-avoidance, long-term/short-term orientation (Vitell, S.J., et al, 2012). Hofstede and Bond added a fifth dimension, categorized it as short-term versus long-term orientation (Chiang, F., 2005).Hofstede’s model may not be a perfect, but is a useful way to tackle culture analysis and comprehend cross-border configuration in terms of these five dimensions. The most relevant to this case would be as following:
Individualism/Collectivism
Individualism/Collectivism this is one of the most used and important dimension. It concerns how strong is unity regarded or whether an individual regards himself/herself as primarily as an individual or primarily as a group. A community with a low Individualism/Collectivism score would have strong unity in their group, and t
here is emphasis on loyalty and respect for among the members of the group. Such groups are large and are more concerned for each other’s well-being. However, a high score indicates more individualistic characters. In countries with a high score, there is a lack of interpersonal connection (Hofstede, 2003).According to Hofstede’s analysis; the UK in this dimension is marked high (Hofstede, 2003). Thus, UK has a strong sense of need for freedom. This also means challenges are welcomed; however, there is a subculture of rewards for hard work and a high respect for privacy. In general, it can that British people are individualist rather than collectivist. Finland like the UK is high on individualism and can work well in this dimension. The USA scores the highest on individualism. The USA has a strong culture, which advocates equal rights in the country. In American organizations, superiors are accessible and managers rely on individual employees and teams for their knowledge. Both managers and employees expect information to flow frequently and to be involved in decision-making. Communication is informal and direct. The society encourages independent views and lifestyles (Hofstede, 1998).
Japan’s culture displays tendencies towards both individualism and collectivism, the British will find the Japanese to be more collectivist and place more emphasis on group harmony. This will reflect in their communication style, where the British are more direct and like open communication. In contrast, to the Japanese who are more indirect, due avoidance to disrupt group harmony (Matsumoto, 1996).
Masculinity/Femininity
Masculinity/Femininity defined as how traditional a society is towards male and female roles. Countries, which have a score high in this dimension, men are the provider and women play home-oriented roles. Men are deemed, as self-assured, and tough. If women work, they usually do not have same professions as men. In a society with a low Masculinity/Femininity score, it observed that women and men working together across many professions. Women allowed to be ambitious about professional success.(Hofstede, 2003).
According to Hofstede, the UK has a low score on masculinity and high in femininity (Hofstede, 2003). The UK offers equal opportunities to men and women. The people in the UK have a well-defined distinction between men’s work and women’s work, there is gender equality, and successful women are accepted and well respected in the British society. The US and Finland come on the same level as the UK in this dimension. In contrast, Japan has a high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement, and success. A low score (Feminism) dimension means that the dominant values in society are caring for others and quality of life.
Long-/Short Term Orientation
Long-/Short term orientation estimates the extent to which a society focuses on its future. However, every society has to maintain a connection with its history while tackling the challenges of the present and future. Cultures, with a low score on this dimension, choose to maintain correlation with traditions and norms while allowing societal transformation. A culture with a score high on the other hand, has a more practical approach: they promote frugality and hard work (Hofstede, G., 2003).
UK, USA, and Finland’s Societies are a low in this dimension and promote high creativity and individualism. This suggests that these countries are not restricted by traditions and customs. In these countries, self-actualization is a norm. Society members do not hesitate to initiate changes, in other words, they are very dynamic (Hofstede, 2003). On the other hand, Japanese score a high in this dimension. They are more traditional and collectivists in approach. Japan prefers the bigger picture. In business, this means a higher focus on long-term ventures (e.g. in R&D) rather than short-term profits (Hofstede & Minkov, 2010).
The CEO should carefully judge these factors while aligning the cross-border cultures. Apply strategies that will help smooth transaction. A good approach to this would be through training.
Training to organizational change in the global context
As organizations become increasingly diverse, some have realized that internationalization exposes its employees to complex challenges of working with diverse cultures across the continents. In turn, employees that are sent aboard usually are given training in the attempt to prepare the individual to adapt to specific cross-cultural context (Dowling, Welch & Schuler, 1999). Identification of this challenge has helped organizations in training initiatives that address the specific needs of everyone in the organization. Based on a review, Dinges (1983) initiated a set of behavioural competencies needed for successful intercultural performance and communication. Some of the behavioural competencies were the interpersonal communication style, ability to maintain mutually rewarding relationships, motivation and an emphasis on personal growth and development. Schneider and Barsoux (1997) also compiled list such competency models that serves as additional guidelines for the design of training interventions within an internationally diverse organization. In the light of this research, training should be implemented to fill the cross-border cultural gap to help align the organization better (Anderson et al 2009).Training programmes will help Lush employees to better work in cross-cultural teams. Different cultures have different ways to select and accept a leader. Team members need to develop trust with each other. However, the process of trust building can differ by culture. Therefore, it seems critical for anyone attempting to lead deliberate creativity by teams that they have an understanding of the ways that team members differ (Gelfand et al, 2006). Hence, training is an important component in managing and implementing culture across the organization. The CEO should implement training and programmes that allow employees to overcome barriers in culture alignment.
Talent management & Job design
Aligned cultures tend to have a more engaged workforce. Research by Golnaz and Brian has shown that when employees and senior leaders have the similar perspectives of the culture, employee engagement metrics (including satisfaction, commitment) are particularly higher than those in less aligned cultures (Golnaz Sadri, Brian Lees, 2001). It is easier to retain more engaged employees. One of the key functions of leaders is recruitment and selection of people who fit into organization culture and keep them committed, engaged and persistent (Hughes & Rog, 2008). Evaluate practices and behaviours that are being reinforced in terms of how employees do their work. Organizations are fast changing, with mergers, globalisation and joint ventures making it more difficult to maintain and sustain an influential and steady organizational culture. This makes it more vital that organizations spend the time to identify and distinguish what their culture should be like, how this culture aligns with their business strategy, and how it can be incorporated across the organization. (Ashton, Morton, 2005).
Job satisfaction and motivation
There are many theories about job satisfaction, which speculate that job satisfaction is the by-product the nature of one’s job or other environmental factors. (Anderson et al, 2009).Herzberg (1967) suggests that factors that lead to satisfaction are often different from those that lead to dissatisfaction. Hackman & Oldham came up with job characteristics model (1960). The model suggests the idea task itself is the vital element to employee motivation. Independence, decision-making, and diversity are three ways of adding challenge to a job. Job rotation and job enrichment are two ways of adding variety and challenge. This model urges that design jobs can add to employee motivation (Fried, & Ferr is, 1987). According to Maslow’s theory, motivation is a mental process through which unsatisfied wants or needs create an urgency aimed at achievements of goals. Culture influences the content and goals pursued (Gambrel, 2003). Findings for countries like United States/United Kingdom and Europe indicated independence and self-actualization were the most important and least satisfied needs. Maslow’s theory, suggests that all these needs were important to workers across-cultures. In conclusion, Organisation should focus most on giving extrinsic rewards to lower-level personnel and on creating a climate where there is challenge, autonomy, the ability to use one’s skills, and cooperation for middle- and upper-level personnel. In addition, reward the upper management with more heavy intrinsic rewards (Koltko-Rivera, 2006).
Conclusion
Leaders should be sensitive to cultural differences when creating a new culture or aligning culture across-borders (Hofstede, 2003). Through Hofstede’s dimensions, a better understanding of how different cultures react to different dimensions can be determined (Hofstede, 2003). This information enables the CEO to improvise plans when it comes to planning and performance management, rewards system, motivation, training and development programmes, job design and recruitment-selection. Implementation of programmes that help with cultural difference and help bridge cross-culture orientation work better and support the objective and preferred employee behaviour and performance.
This essay talks about the importance to have multiple competencies to deal with challenges like cross-border operation. Innovative approaches such as training programmes, talent management, and job design should be implemented by the CEO while culture alignment and management.
It is a leader’s responsibility to understand and find ways to bridge cultural differences, and balance it with leadership experience, knowledge (Hoecklin, 2010).A combination of leadership style works well in all situations (House et al., 1988). With the changing time, leaders should broaden their horizons of strategy and cross-cultural awareness. Besides, there is an increasing need for flexible model that can adapt to national and cross-cultural situations.