GLOBALIZATION

Globalization’s Impact On Organization Culture Robert J. Greene, PhD, GPHR, GRP, CPHRC CEO

Reward Systems, Inc. & DePaul University Faculty 

Can A Single Corporate Culture Survive Globalization? The Critical Question: Same culture globally OR Different cultures locally? But Global or Local Is Not Even Valid In The Headquarters Country/Culture • For example: Defining, measuring and rewarding performance in the same way does not work well across functions, business units and occupations (See “Rewarding Performance: Guiding Principles; Custom Strategies” ) • When we cross national/ethnic/cultural boundaries the question gets even more difficult to answer Globalization Produces Diverse Workforces • Going “there” means facing different – laws – economics – logistics – cultures • If you don’t go “there” they will come to you – labor is more mobile – supply/demand imbalances worsening • Either results in cultural differences Organizational Culture and Workforce Culture Must Be Compatible • Employees have varied beliefs, values, priorities and perceptions… and they have agendas/intent to deal with • In order for our systems to be accepted by these people they need to be viewed as equitable, competitive and appropriate • But there are different perceptions of what is equitable, competitive and appropriate PERFORMANCE REWARDS What you measure and reward… You most surely will get more of (as long as it is accepted as appropriate) Defining Performance Is Critical: Is It… • Loyalty? • Longevity? • Competence? • Potential? • Results? • Behavior? • Combination of above? • The same in all cultures? Cultural Diversity Can Change Everything • Management style that is effective • Definition of performance – Results vs. person focus – Individual vs. group focus – Short vs. long-term focus – Hierarchy/high power distance vs. egalitarian – Internal vs. external control assumed • Rewards accepted as appropriate Cultural Differences Can Kill • Korean Air fatal accidents due to crew members unwilling to challenge Captain to correct mistakes (the book Outliers by Gladwell) • Surgical team errors due to lower status members (nurses; techs) unwilling to challenge Surgeons can cause harm • Conflicting workforce cultures can impact effectiveness of everything (HR strategies and approaches) National/Ethnic Culture • Socialization into a culture impacts beliefs, values and expectations of individuals • Research shows significant differences across national/ethnic cultures • Failure to recognize and respect differences can lead to strategies that don’t work • Reconciling issues caused by cultural differences is the challenge Cultural Contrasts: Impact All HRM Strategies EASTERN/SOUTHERN – Communitarian – Hierarchical – Particularistic – Ascribed Status – Person-focused – External Control – Intuitive/Holistic WESTERN/NORTHERN – Individualistic – Egalitarian – Universalistic – Achieved Status – Task-focused – Internal Control – Analytical/ Reductionist Hypotheses: Impact Of Culture On Rewarding Performance • Measuring/rewarding individual performance more acceptable in individualistic cultures • Rewarding performance more accepted in internal control cultures • Rewarding results more accepted in achievement-oriented cultures • Rewarding performance using common systems more accepted in universalistic cultures Hypotheses (Cont) • Allowing employee participation in defining, measuring and rewarding performance more accepted in low power-distance cultures • Effectiveness of 360 degree feedback is highest among cultures that are: – Individualistic – Low in power distance – Masculine – Low context – Western Culture Will Directly Impact Rewards Strategy Effectiveness • In ascriptive cultures who the person is may influence the pay rate, disconnected from competence or performance • In collectivist cultures there will be pressure to pay everyone who is “similarly situated” the same or similarly • In high power distance cultures there will be no overlap across vertical levels • In external control cultures there will be less emphasis on tying to performance But Be Careful Of Stereotyping By Nation • There is as much or more difference within countries as between them when it comes to rewards strategies/programs – Industry differences – Location differences – Economic differences – Organizational culture differences – Workforce demographic differences When To Strive For Global Consistency • Internal equity is a focus (e.g., global teams) • Mobility of personnel important • Broad-based ownership deemed desirable • Alignment with mission/goals important • Need to communicate overarching values • Need to promote cultural consistency • Administration needs to be done centrally When To Customize Culture Locally • When cultural differences within the local workforces result in a lack of acceptance of a single worldwide organizational culture • When the nature of the variation from organizational culture does not violate core values adopted by the organization • When local laws/ mores conflict with behaviors prescribed by the organizational culture The 3 R’s Of Cross-Cultural Management • Trompenaars provides three rules: – Recognize cultural differences – Respect people’s right to differ – Reconcile the issues differences create If Nothing Else Works… Consult Wizards! Reward $ystems, Inc. Robert J. Greene PhD, SPHR, GPHR, CPHRC, CCB, CBP, GRP Reward Systems, Inc. 1917 Henley, Glenview, IL 60025 847-477-3124 RobertJGreene.com RewardSystems@sbcglobal.net Mission: “Helping Organizations Succeed Through People” Reward $ystems, Inc.