Outline some of the key differences or features between the American and Argentinean cultures, and look at the implications of these differences by Hofstede's (1991) and INSEAD.
Firstly, Hofstede's model was invented by Gerard Hendrik Hofstede, who is a Dutch organizational sociologist and studied the interactions between national cultures and organizational cultures.
One of the main studies which attempted to set up the impact of culture differences on management was conducted in the late 1960s. Hofstede's findings, there are four main value dimensions: 1) Power distance - indicate that the extent to which a community accepts the not the same distribution of power in institutions and organizations. 2) Uncertainty avoidance - Uncertainty avoidance refers to a society's discomfort with uncertainty, prefer predictability and stability. 3) Masculinity vs. femininity dimension - reveals the bias towards either 'masculine' values of assertiveness, competitiveness and materialism or towards 'feminine' values of nurturing and the quality of life and relationships. 4) Individualism vs. collectivism - reflects the extent to which people prefer to pay attention themselves and their immediate families, remaining emotionally independence from groups, organizations, and other collectivities. (Susan C. Scheide, Jean-Louis Barsoux, 2003)
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According to the rank of Hofstede's findings (1991) Cultures and Organization, the united states have the higher index in individualism (rank: 1) than Argentina (index: 46; rank: 22-3). The Argentina have the higher index in uncertainty avoidance (index: 86; rank: 10-15) than the United States (index: 46, rank: 43). On the other hands, The Argentina have 49 index and ranked 35-36 in power distance, the united states have 40 index and ranked 38 in power distance. The Argentina has 56 indexes and ranked 10-15 in power distance, the United States have 62 indexes and ranked 15 in masculinity. (Susan C. Scheider,Jean-Louis Barsoux, 2003)
Because of high uncertainty avoidance, so organizations in Argentina would tend to have more formalization evident than the United States (head office) in a greater the amount of written rules and procedures, the lower index in uncertainty avoidance in the United States. In addition Argentina manager in MOCDON would avoid taking risks and would be motivated by stability and security than the United States (head office) manager, there would be greater specification evident in the importance attached to technical competence in the role of staff and in defining jobs and functions.
As Argentina is a very risk-averse society, it is important to reduce risk, anxiety and uncertainty. (Spethman Martin, 2009-2010) Because the united states have the higher index in individualism (rank: 1) than Argentina (index: 46; rank: 22-3), the United States can clearly been seen as individualistic (scoring a 91). The high Individualism (IDV) ranking for the United States indicates as the community with a more individualistic attitude and relatively loose bonds with others. In individualist cultures, people are expected to develop and display their individual personalities and to choose their own affiliations. Therefore, the United States is an individualism culture and to emphasize individual achievement and element of personal success.
Gerard Hendrik Hofstede then positioned them along two dimensions at a time, creating a series of cultural maps, includes village market (Anglo/Nordic), pyramid of power(Latin), family(Asian) and well-oiled machine(Germanic). According to Hofsted's maps, small power distance and weak uncertainty avoidance in the United States, it is village market. On the other hands, large power distance but strong uncertainty avoidance in the Argentina, so it is pyramid of power. Argentina scores high on power distance.
These difference in structural preferences also emerged in a study conducted by Steven at INSEAD. Actually, the image of the United States firms (e.g. head office) as 'village market' (Anglo/Nordic), they were more likely to be decentralized, generalist, people as free agents, entrepreneurial, flexibility, more delegation and coordination through informal, personal communication and output control. But the image of Argentina firms (e.g. branch firms in MODCON) as 'pyramid of people' (Latin) and traditional bureaucracy, they were more likely to be centralized decision-making, elitist (power and authority), coordination at the top, less delegation, 'Cloisonné' highly specialized, analytic ability, pyramid of people, informal relationship and input control.
The research findings confirmed the image of the United States firms (e.g. head office) is higher the need for hierarchy than Argentina firms, for formal rules and procedures, specialized jobs and functions.
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Most village market is characterized by small power distance (flat hierarchies in business) and weak uncertainty avoidance. These are basically the 'pragmatic' countries, including Canada, United States, Australia, Ireland, Britain, Norway and Denmark, the most individualist and universalistic which rely often on ad hoc solutions to problems. (Joynt Pat, Warner Malcolm, 1996) However, cultures like Argentina that are high on power distance accept power and hierarchy in society and are low on egalitarianism. In such cultures, less powerful citizens are accepting of unequal power distribution in society. (Spethman Martin, 2009-2010)
And then, village market as America has low hierarchy level, but 'pyramid of people' as Argentina has high hierarchy level. Thus, Hierarchy and authority status and power are important in Argentina management. Argentina manager takes the approach of centralized decision-making rather than developing decisions to department managers. Therefore, there is insignificant flexibility demonstrated and following rules and procedures is considered important in Argentina. For examples, Thailand is a very hierarchical society in which people know their place and respect authority and power.
High-Low context: As Argentina is high context culture, the values and communications style consistent with the high-context valve like harmony and aesthetics can help achieve cultural customization. As USA is low context culture, the values and communications style consistent with explicit, consciously organized, Task-centered decisions and activities focus around what desires to be done, division of responsibilities.
On the other hands, the characterization of organizations as pyramids, well-oiled machines, village markets, and family tribes, and the structural correlates are further reflected in the organizational processes. Consequently the influence of culture can be seen in organizational processes for example the nature of policies and procedures, planning and control, information processing and communication, and decision-making.
In conclusion, Hofstede cultural dimension is to be used as a guide to understanding the difference in culture between countries. Hofstede's research gives us insights into other cultures, thus we can be more effective when interacting with people in other countries.
There are two cultural models of strategy based on cultural assumptions. Cultural determinations of strategy are the controlling and the adapting models. Different assumptions guide to different models of strategic management - 'controlling' versus 'adapting'.
First of all, controlling model can be characterized as centralized (scanning department) and planning is formalized (systems), information include quantitative (individual report, econometrics) and objective implementation such as task and achievement-oriented.
Besides these features of controlling model, there are some cultural assumptions of controlling model, include environment can be known, top managers may call in expert consultants to assist in devising strategies, also make most excellent decisions (well-knowledge), time is linear and segmented (monochromic time - planning within a given timetable); time horizon are short term and action plans are sequential. Scanning is active search, focused and systematic. Types and sources of Information are quantitative, object and impersonal.
Controlling model is also interpreting information relies on formal models and methods, for examples strategic forecasting and scenario planning. People involved are mostly at the top or expert. Strategic goals and action plans are clearly defined and articulated, explicitly measured and rewarded.
On the contrary, adapting model is more decentralized and informal (discussion), monitoring, broad and sporadic. Responsibility for strategy is diffused throughout the organization. Adapting model is also called due to flexibility - prepare to react unforeseeable events and continue to improve Information - qualitative and subjective (from friends and colleagues or observations)
Adapting model is also strategic direction, implementation - locally determined. There are some cultural assumptions of controlling model, include cultural assumptions: environment cannot be known, personal relationships and interactions are keys, strategic implementation hinges on internal capabilities - continuous improvement. Types and sources of Information are quantitative, object and personal.
Adapting model is informal methods (home grown models), discussion and debate. People involved are across the ranks and employees. Decisions in adapting models are made on the front lines and consensual. Strategic goals and action plans are broad and implicit, vaguely monitored and strategic vision is often philosophical. Time horizons are long term and action plans are simultaneous. And then, truth and reality, or knowledge, are more likely to be arrived at through a 'sixth sense', feeling or intuition.
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Therefore, which one is associated more with the Argentinean subsidiary? Controlling model is associated more with the Argentina subsidiary in Modcon. As a result, Hierarchy and authority status and power are important in Argentina management. Argentina manager takes the approach of centralized decision-making rather than developing decisions to department managers. Therefore, there is insignificant flexibility demonstrated and following rules and procedures is considered important in Argentina.
Which one is associated more with the American head office (provide supportive evidence)? Adapting model is associated more with the American head office. Argentina manager takes the approach of decentralized decision-making and the image of the United States firms (e.g. head office) as 'village market' (Anglo/Nordic), they were more likely to be decentralized, generalist, people as free agents, entrepreneurial, flexibility, more delegation and coordination through informal, personal communication and output control.
Which model would I recommend and believe to be relevant for Modcon? On the other hands, MODCON has now been in Argentina for just three months. Since there have been a number of problems in Argentina unluckily, the main problems are a lack of understanding of cultural differences, and how to manage these in Argentina. There has been quite a few conflict situations emerge over such things as how decisions are made, approaches to delegation, degree of specialization, flexibility.
Because Argentinean manager takes the approach of centralized decision-making and people are hired and valued in Argentina based on their specialized skills, as a result I recommend to the CEO in MODCON to use adapting model in Argentina subsidiary. In fact, the image of the United States firms (e.g. head office) as 'village market' (Anglo/Nordic), they were more likely to be decentralized, what are the advantages of and decentralization?
The advantages of decentralization include the delegation, unburdening of top managers; decision making that is regularly better for the reason that decisions are made closer to the scene of action; better training, morale and initiative at lower levels; and more flexibility and faster decision making in speedily changing environments.
Typically, Argentina subsidiaries were more likely to be decentralized and specialist, specialist frequently refers to an expert in a profession, but using adapting model can resolve some problems in Argentina subsidiaries, for examples, Argentina subsidiaries can provide more generalized (unspecialized ) skill training courses for managers and staffs such as IT skills training, languages (e.g. english, Chinese and Japanese) courses and communication skills courses.
Many Argentina managers are generalists who have information, ability, or skill in a variety of areas, as contrasted with a specialist. A generalist - a modern scholar who is in a position to get more than good knowledge about many different interests; "a statistician has to be something of a generalist". Argentinean managers learn more skills to handle the different problems or tasks in MODCON.
Provide a guide to cultural differences is one of the functions of cross- cultural studies. On the other hand, one consequence is this can guide to overdependence on cultural stereotypes.
Burgess, Heidi stated that (Breslin, J. William 1991) stereotypes (or "characterizations") are generalizations or assumptions that people make about the characteristics of all members of a group, based on an image (often wrong) about what people in that group are like. Why do people form opinions about other people based on their appearance, posture, language? We stereotype people when we are not capable or unwilling to get all of the information we must to make a fair judgments about people or situations.
For instance, one study of stereotypes revealed that Americans are generally considered to be friendly, generous, and tolerant, although also arrogant, impatient, and domineering. Conversely Asians, are expected to be shrewd and alert, but reserved. Undoubtedly, not all Americans are friendly and generous; and not all Asians are reserved. Although according to this study, others commonly perceive them this way. (Burgess, Heidi, 2003). Stereotypes exist of different groups of people as found within US and Asian culture.
In addition, Susan C. Scheider and Jean-Louis Barsoux stated that stereotyping comes naturally. (Susan C. Scheider and Jean-Louis Barsoux, 2003) Many of us have been brought up to think of stereotyping as bad- as ignorant and immoral; as evidence of prejudice and bigotry. It also indeed is wrong, based on misinformation and hurtful, it also used to discredit the other.
Furthermore, stereotypes represents mental file that used to help process new information by comparing it with past experience and knowledge. For examples gender and cultural stereotypes, customarily the female's role was to be in charge of domestic matters, for instance serving her husband, care her children, and performing household chores like food preparation and cleaning in Asian countries. "Tolerance" and "obedience" were women's in Asian countries attitudes towards their lives.
Why do cultural stereotypes exist? And then, ignoring cultural similarities is just as dangerous as ignoring differences in personality. (Susan C. Scheider and Jean-Louis Barsoux, 2003) Stereotype production is based on Simplification, Exaggeration or distortion, Generalization and Presentation of cultural attributes as being 'natural'. Stereotypes can have negative and positive sides on individual and on business. What might be the negative side of stereotypes? Firstly, the problem with stereotypes is not their existence but the way they are used. For examples, the people assume that" All Americans are the same if on meeting an Americans, then I have imposed my mental file or stereotype easily, on the current reality, cramming new data into old boxes, the employees may not hire the job applicants from the United States because of cultural stereotypes, they choose to hire the job applicants from other countries, such as France.
Secondly, the problem with stereotyping is that it conjures up an image of stamping the same type on every blank face. In other words, members of the same culture are expected to have more in common than with members of the others. For examples, the emotions of Italians and Swedes, it may be possible to find quite a few Italians who are more reserved and more Swedes who are fairly expressive. Many people can suppose Swedish managers to be more reserved and more like other Swedes than that their Italians counterparts.
Thirdly, many members often stereotype their different colleagues rather than perceiving and evaluating those individuals' contributions, capabilities, aspirations, and motivations in a business meeting. Such stereotypes in turn influence how people are treated. Employees stereotyped as unmotivated or emotional will be given less stress provoking job than their co-worker, as a result create frustrated employees, maybe resulting in lesser commitment, higher turnover and underused skills, this is a negative thing of cultural stereotypes in business management, it also brings us many problems.
In summary, sometimes the stereotype is reasonably accurate, but it is useful. Stereotypes are only a problem while they are incorrect, mainly when those inaccuracies are negative and hostile.
As soon as the Argentinean and American managers meet to talk about their present concerns, one aim will begin to work as a team. At the present time, more and more firms are turning towards team as a good method of managing increasingly complex and dynamic environment.
Teams are also seen as responding to complexity by bringing together a variety of perspective, finding solutions to solve problems of internal integration. All the time more, many firms are promoting the practice of employees participating in multiple teams for multiple purposes. They are setting up greater numbers of temporary and permanent work groups- projects teams, task forces, steering committees, commissions, and boards. People drawn from different functions, different units, and different levels inside the organization and from the outside have to learn to work together. Why multicultural teams? Because pooling experience across national boundaries, enhancing local commitment to strategic directions, promote better decision making, greater creativity and innovation and improve communication and information flow, facilitating implementation.
What would be the three key process strategies that you believe this team of managers needs to focus on? The three key process strategies that this team of Argentinean and American managers need to focus on:
Team building -- when it comes to building teams, Argentinean and American managers tend to have a more task-oriented, mechanistic view. Building a team is putting together by assembling a group of individuals, setting the goal, and then expecting them to function efficiently and successfully, or fixing them if they not succeed to do so. Team-building are also designed to establish trust, for examples American - "extend goodwill unless you have reason to distrust". Americans build trust by being friendly and informal.
Reasons for team building are improving communication, making the workplace more enjoyable, motivating a team, helping participants to learn more about themselves (strengths and weaknesses), Improving team productivity.
Process strategies of team building, for examples how trust developed is. The culture determinants are task versus relationship. How much time for social activities? The culture determinant is monochromic versus polychromic and high versus low context.
2) Choosing how to communicate -- Professor Anne Donnelon state that ( Donnelon, A. 1996) teams do their work through language and that the work they do is conversation.
The way in which teams 'talk' creates thoughts and feelings, problem solving and learning and enhancing relationship. 'Team talk' too reveals how issues of identify, interdependence, power, social distance, conflict, and negotiation are needed. Hence, being able to decipher language and communication patterns is extremely important to negotiating stategies for working together.
Teams have to guard against vesting all the power in both mangers from the host country, from the parent company, or in members with the same mother tongue. Some questions to ask about process strategies for Argentinean and American managers to choose how to communicate, such as how will they address people? First/last name? Title? How language will they use? USA and Argentina team leaders need to have good interpersonal skills; serve as facilitator.
Resolving conflict - For teams to function effectively they need to establish mechanisms or ways of resolving conflict. This present a problem for multicultural teams, given different norms for managing conflicts. Modes of conflict resolution have been classified according to degrees of assertivatiness and cooperativeness included competing, collaborating, compromising, accommodating and avoiding. (Thomas,K. 1976)
Some questions to ask about process strategies for Argentinean and American managers to resolve conflict, such as how is conflict managed? Forcing, accommodating, avoiding, collaborating, and compromising? How is a negotiation view? Win/ Lose, or win/win?
In conclusion, other expectations relate to process strategies: 'Choose How to communicate', 'Resolve Conflict', 'Team Building 'and 'Elicit Participation' 'Evaluate performance'.
In MODCON, the subsidiary is in Argentina, but the parent company is in America. One of the key HRM activities that the Argentinean subsidiary is still engaged in is the recruitment and selection of personnel in such areas, for examples marketing, sales and production of its products.
The cultural meaning of HRM means that HRM can be considered as strategic or worldwide depends on national context and culture.
Today, many firms can choose from a menu of HRM practices that concern selection and socialization, management training, development, appraisal, compensation and career development. It is also the influence of nationalized culture on the development and transfer of HRM practices. What would be some of the key issues and concerns that Modcom needs to address in this process?
Firstly, selection is an actÂ or instance of selecting or theÂ state of being selected and make a choice. In selection process,. the Argentinean managers in Argentinean subsidiary must consider that how to access 'equivalent' labor (education, age). The Argentinean managers in HRM department should consider the different national values such as skills, education, subjects, languages and universities in the selection process.
Secondly, selection is also finding the right people that are often one of the most important challenges, particularly when unfamiliar with the nature of the local labor market or the available human resource. This makes difficult the task of finding those candidates who have the competence to get the job done and who seem likely to fit in with the existing corporate culture. This may mean that a firm has to look in very different places to find the same kind of people in terms of abilities as well as behavior, beliefs, and values. (Susan C. Scheider,Jean-Louis Barsoux, 2003)
Some questions to ask about HRM issues (selection), for instances who to hire? How to hire? Desired behaviors- focus on skills or personality? The culture determinants are doing versus being. Specialists versus generalists? The culture determinants are Uncertainty avoidance. Necessary qualifications? The culture determinants are power or hierarchy. Level, discipline, or preferred institutions? The culture determinants are individual versus collective. How important is 'what you know 'versus 'who you know'?
However, in Argentina there is a reasonable higher uncertainty avoidance, so managers in Argentina MODCON subsidiary can ask some questions to ask about HRM issues (selection), for examples, specialists versus generalists? The culture determinants is high index on uncertainty avoidance and cultures like Argentina that are high on power distance, so Argentina managers in Argentina MODCON subsidiary can ask what the necessary qualifications for job applicants was.
Recruitment is the procedure of finding people to work for a firm or become a new member of an organization, In recruitment process, the Argentinean managers in Argentinean subsidiary must consider how to recruit the suitable job applicants through employment agencies, personal connections (guanxi), recruitment advertisement or recruitment websites and job search engines, "headhunters" for executive.
When recruiting globally, many firms need to know how to access 'equivalent' labor pools. Different in education systems make it difficult to figure out who has the right profile.
In addition, cultural differences don't just influence where firms need to recruit, but also how they go about it. For example, hiring in China may require going through government agencies, such as personal connections (guanxi), local labor bureaus.
A strategic approach to the recruitment/retention problem is needed - one that digs into the roots of high turnover and identify cultural changes as well as pay and good quality packages that will satisfy employees - rather than the ''replacement mentality'' HR managers seem prone to. (Stone, Florence, 2002)
First of all, strategies for managing cultural differences are three basic organizational strategies for managing cultural differences- ignore, minimize, or utilize. Cox and Blake (1991) think that competitive advantage derives from cultural diversity. Creating competitive advantages is very important for both managers to resolve the problems and improve Mocdon business image, for examples, multiple cultural spheres of influence interact, importance of planning, new technology (converging communications, information, multimedia), changing regulations (banking and insurance) and changing economic and political conditions such as finding new markets.
Advantages of cultural diversity are sensitivity to different markets, resource acquisition - HR, reduces cost - non-home personnel turnover, improves decision making, and enhances creativity, organizational flexibility and responsiveness. Build face-to-face relationships, create international projects, develop international management training and development and build shared values, encourage local interpretation and promote divergent values.
Multicultural organization - diversity is valued and utilized, rather than merely contained - creating competitive advantage. Cultural diversity is taking people from different backgrounds, with different expectations, and at different stages of life and melding them into a force that will drive the firm's profitability and competitiveness, such as Hewlett Packard. Diversity also can enhance problem-solving capability, innovation, and creativity.
Top management teams designing strategy involve different perspectives to reflect the complexity of operating in an international area, emphasizing national differences.
The reason given for utilizing cultural differences is greater sensitivity to different nations market. People from differing cultures are more likely to develop products that appeal to the different tastes of customers.
Cox (1991) also argued that organizations must become multicultural to capitalize on the benefits and minimize the costs associated with diversity. (Cox and S. Blake, 1991) Outline the six key advantages of cultural diversity:
Marketing argument: Increase the ability to respond to cultural preferences of local markets.
Resource acquisition: Increase ability to recruit employees of different national backgrounds and host country elites.
Cost argument: Reduces cost incurred by turnover of non-home country managers.
4) Problem-making argument: Improves decision-making through wider range of perspectives more through critical analysis.
5) Creativity argument: Enhances creativity through diversity of perspectives and less emphasis on conformity.
6) System flexibility argument: Enhances organizational flexibility and responsiveness to multiple demands and changing environments.
As today's businesses migrate towards a global environment, the culture diversity present in firms has been growing at a fast pace. However, the value of cultural diversity contained in the organizational environment is a great asset from both a social and financial perspective.
In summary, Cox and Blake (1991) recommend that six dimensions of business performance, such as expenditure, attraction of human resources, marketing success, creativity and innovation, analytical quality, and organizational flexibility, can be directly influenced by the management of diversity.