Managerial Environments PDF

8/9/2024 Managerial Environments Text: Chapter 4...

8/9/2024 Managerial Environments Text: Chapter 4 1 4. Managerial environments 1 To review: The global management work environment (Exhibit 4.1) Situational contingencies (personalities, location, historical sensitivities, timelines, crises) 2 4. Managerial environments 2 1  8/9/2024 Think about it... You get very different thinking if you sit in Shanghai or São Paulo or Dubai than if you sit in New York. Michael Cannon-Brooks IBM 3 4. Managerial environments 3 Learning objectives Explore managerial role expectations across cultures Examine patterns of managerial thinking Recognize situational contingencies affecting managerial behavior Explore work values and global patterns of work motivation Examine the role of gender in the global workplace 4 4. Managerial environments 4 2  8/9/2024 What are managerial roles? (Exhibit 4.2) Interpersonal roles Figurehead Figureheads have considerable symbolic value in some cultures; in others, being described as a figurehead is not seen as a compliment. Leader Individualistic cultures prefer highly visible “take charge” leaders; collectivistic cultures prefer more consultative leaders. Liaison Some cultures prefer informal contacts based on long-standing personal relationships; others prefer to use official representatives. Informational roles Monitor Culture often influences both the extent of information monitoring and which specific information sources receive greatest attention. Disseminator In some cultures, the context surrounding a message is more important than the message itself; in others, the reverse is true. Spokesperson Culture often influences who is respected and seen as a legitimate spokesperson for an organization. Decisional roles Entrepreneur Some cultures are highly supportive of innovation and change; others prefer the status quo and resist change. Disturbance handler Some cultures resolve conflict quietly; others accept and at times encourage a more public approach. Resource allocator Hierarchical cultures support differential resource allocations; egalitarian cultures prefer greater equality or equity in distributions. Negotiator Some cultures negotiate all items in a proposed contract simultaneously; others negotiate each item sequentially. 5 4. Managerial environments 5 What are expectations of managers? (Exhibit 4.3) Managers must have The main reason for a It is OK to bypass the answers to most chain of command is chain of command to questions asked by so people know who get something done Country subordinates has authority efficiently China 74 70 59 France 53 43 43 Germany 46 26 45 Indonesia 73 83 51 Italy 66 – 56 Japan 78 50 – Netherlands 17 31 44 Spain – 34 74 Sweden 10 30 26 United Kingdom 27 34 35 United States 18 17 32 6 4. Managerial environments 6 3  8/9/2024 What are managerial characteristics? Examples (Exhibit 4.4) Manager’s sense of drive and Manager’s willingness to delegate initiative (percentage of authority (percentage of agreement by Country agreement by managers) Country managers) United States 74 Sweden 76 Sweden 72 Japan 69 Japan 72 Norway 69 Finland 70 USA 66 South Korea 68 Singapore 65 Netherlands 67 Denmark 65 Singapore 66 Canada 64 Switzerland 66 Finland 63 Belgium 65 Switzerland 62 7 4. Managerial environments 7 Patterns of managerial thinking Cognitions (thought processes) and subsequent behaviors (e.g., working hard) are heavily influenced by what are called our cognitive schemas. Cognitive schemas are mental repositories of knowledge that store representations about what things are, their characteristics, and what they might be related to. Cognitive schema include people’s knowledge base, expectations, experiences, and biases—that is, how people make sense out of their world 8 4. Managerial environments 8 4  8/9/2024 Example of cognitive schema: What is a supervisor? (Exhibit 4.5) Germany UK, US Supervisor as overseer and expert; Supervisor as motivator and technical authority (meister) controller; formal authority (boss) Supervisory roles across cultures Japan Mexico Supervisor as organizer, role model, Supervisor as protector; personal and "parent"; social authority (kacho) authority (patrón) 9 4. Managerial environments 9 Management application 4.1 What is a supervisor? 1. What are the implications of these different meanings for the supervisory role in the workplace and for those who report to these supervisors? Explain. 2. What is your personal definition of a “supervisor”? Where did your definition come from? How did it develop? 3. If you were assigned to meet with several supervisors from other countries (e.g., Turkey, Kenya, or Chile), how would you learn about the supervisory role in those locations prior to your meeting? 4. How can cognitive schema such as the one discussed here limit or liberate women who work in supervisory roles? 5. Can you think of another cognitive schema in the workplace that may vary across cultures? 10 4. Managerial environments 10 5  8/9/2024 Situational contingencies and managerial behavior Consider: The debate over whether or how much culture influences action obscures a crucial insight: culture’s influences vary by context. 11 4. Managerial environments 11 Situational contingencies and managerial behavior (Exhibit 4.6) Personality; Clarity of purpose; gender; cultural knowledge of topic patterns; power under discussion; distribution; understanding of tolerance for limits and timelines ambiguity; assertiveness Individual Goals and differences tasks Roles and Location responsibilities Geographic location; meeting Buyer or seller; location (e.g., rank and seniority; office or decision restaurant); autonomy; language-in-use company policies 12 4. Managerial environments 12 6  8/9/2024 Company cars at Intel, Netherlands A small Dutch high-tech firm was recently acquired by US electronics giant Intel. Consistent with Dutch tradition, the small company had long provided many of its middle managers with company cars to offset the country’s high tax rate on personal incomes. In the eyes of its employees, this was part of their compensation package. To many outsiders, however, the proliferation of new Mercedes and BMWs among the managers of the small start-up seemed rather excessive. After the acquisition of the company by Intel Corporation, Intel’s HRM executives sought to rescind the Dutch company’s car policy, since it was far more generous than that of the parent company back in the United States. Following a number of complaints and several key resignations, however, the parent-company policy change was dropped. This example illustrates the conflicts and challenges faced by many of today’s global managers. From their standpoint, the Intel executives were seeking equality in their employee personnel policies across the two countries, but from the Dutch standpoint the company cars were part of this equality, since their income tax rate on salaries is substantially higher than that for their US counterparts. Again, as has been suggested, situation is everything. 3. Organizational environments 13 13 Management application 4.2 Company cars at Intel, Netherlands 1. Should reward systems within a multinational company be the same across the globe or tailored to each country or region? What problems can each of these two approaches create? 2. Sitting in the corporate headquarters of a multinational firm, how could you as a manager learn what level of compensation and benefits is both fair and functional across a company’s operations? 3. As a supervisor, how would you explain to Intel’s American managers why Dutch employees at the same level receive cars but they do not? Would you use a different explanation in a different country that you are familiar with? 4. Other than compensation, what other aspects of a multinational company might have to be localized rather than standardized across all countries in which it operates? 14 4. Managerial environments 14 7  8/9/2024 Work values across cultures (Exhibit 4.7) Cultural background Social, religious, and family environment governing general beliefs and values Cultural reinforcement Work values Appropriate behaviors elicit Personal beliefs about social and self-approval that appropriate work-related reinforces cultural values attitudes and behaviors Behavioral consequences On-the-job behaviors (e.g., work effort, commitment to firm) 15 4. Managerial environments 15 Work and leisure: Working hours (Exhibit 4.8) Country Hours Country Hours Country Hours Australia 1669 Greece 2035 Russia 1974 Belgium 1551 Hungary 1761 South Korea 2069 Canada 1703 Ireland 1878 Spain 1695 Czech Republic 1770 Japan 1713 Sweden 1621 Denmark 1410 Mexico 2255 Switzerland 1590 Finland 1621 New Zealand 1752 UK 1676 France 1472 Poland 1928 USA 1783 Germany 1363 Portugal 1842 OECD average 1763 16 4. Managerial environments 16 8  8/9/2024 Extreme work values at Tesla What drives people who work at Tesla? One factor is an unrelenting pressure to perform, where the example is set from the top. When a technical problem slowed the production line, Elon Musk, company CEO, moved a cot onto the factory oor so he could work on the problem 24/7. Employees who don’t share this passion quickly leave, but there are plenty of applicants to replace them. Each year, almost half a million people apply for jobs at Tesla, the most applicants of any company in the US. Tesla’s stated mission of accelerating the world’s transition to sustainable energy and its strong leadership from the top appeals to many of its 45,000 employees, who are sometimes willing to work 100-hour shifts and eschew many of the common perks of technology companies, such as free food. Instead, many employees report that they run on adrenaline, stock options, and a shared passion with company leaders to change the world. Kiran Karunakaran, at twenty-nine, passed up higherpaying offers from Apple and Alphabet to join Tesla. “What really attracts young people to Tesla is instant gratification,” he said. “You see incredible things you’ve worked on come to fruition, on the road, in months.” Meanwhile Anusha Atluri, a second-year MBA student working on a summer internship, spotted a way to tweak a step on the manufacturing line that she thought might speed up production. She suggested to her supervisors that they consider her suggestion during the next week. “They were like, why not just try it tomorrow?” One manager left Tesla to have a baby but was soon back on the job. “Life isn’t about working less,” she observed. “Everybody should have more work than they can possibly finish at all times.” As Tesla moves to build its new Chinese factory, questions emerge about whether the company will attempt to replicate its value system overseas or seek to accommodate local work values. 3. Organizational environments 17 17 Management application 4.3 Extreme work values at Tesla 1. In your view, could Tesla’s high individualism/high performance work environment succeed in other countries? What countries and why? 2. Tesla has what one might describe as an “extreme” work environment where performance trumps everything else, including a work-life balance. What are the potential short and long-term consequences of such an environment for both the company and its employees? 3. Would you like to work at Tesla? Why or why not? 4. As Tesla prepares to open a new factory in China, would it be wise to attempt to replicate its work culture in this new setting? What are the potential benefits and pitfalls of such an attempt? 5. How difficult would it be to establish Tesla factories in other parts of the world (e.g., Europe, Latin America) without changing the corporate culture? And if Tesla changed its corporate culture, what would happen to the company? Would it still be Tesla? Explain. 18 4. Managerial environments 18 9  8/9/2024 Discussion intrinsic reward vs extrinsic reward 3. Organizational environments 19 19 How can cultural differences influence employee motivation? (Exhibit 4.9) Individualistic cultures tend to emphasize: extrinsic rewards tied to personal achievement; individually based incentives; personal responsibility for accomplishment; viewing employees as performers; and providing employees with autonomy and opportunities for advancement. Collectivistic cultures tend to emphasize intrinsic rewards (e.g., meaningful work) tied to commitment and loyalty; group-based incentives; group norms and moral persuasion; viewing employees as family members; and building teams and networks focused on task performance. Hierarchical cultures tend to emphasize: extrinsic rewards; large salary differentials; clear directives to subordinates; decisive and powerful leaders; and rewards for complying with managerial directives. Egalitarian cultures tend to emphasize intrinsic rewards; minimal salary differentials; participative or consultative decision-making; flexible or collaborative leaders; and rewards for creativity and constructive feedback. Mastery-based cultures tend to emphasize: competitive environments within the organization to stimulate best efforts; using performance-based incentives with monetary rewards; showcasing high performers; encouraging thinking big and conquering the environment; and assertiveness training programs. Harmony-based cultures tend to emphasize: group harmony and team efforts for collective results; seniority or membership-based incentives; showcasing team efforts and organization-wide accomplishments; encouraging respect for traditions and the environment; and encouraging continued membership for the entire work force. 20 4. Managerial environments 20 10  8/9/2024 How can cultural differences influence employee motivation? Sequential (monochronic) cultures tend to emphasize: providing people with simple sequential directions; providing strict time limits for each project with intermittent updates; focusing on the job; and keeping personal relations to a minimum. Synchronic (polychronic) cultures tend to emphasize: greater flexibility in how tasks are approached; flexible time limits for various tasks; progress checks through personal discussions; and greater focus on personal relations as a means of succeeding on the job. Universalistic (rule-based) cultures tend to emphasize: clearly acknowledged rules, regulations; universal enforcement; providing people with certainty and security; rewards tied to compliance; and decisions based on objective criteria. Particularistic (relationship-based) cultures tend to emphasize: building interpersonal trust as a basis for relationships; investing time meeting with employees; building informal networks; using influential people to help motivate others; recognizing extenuating circumstances in rule enforcement; and decisions often based on personal ties. 21 4. Managerial environments 21 How can cultural differences influence CEO pay? (Exhibit 4.10) Country Average Average annual Average ratio of annual CEO employee CEO to employee compensatio compensation compensation n Australia $4.2 million 45,000 93:1 Austria 1.6 million 44,000 36:1 Czech Republic 2.2 million 20,000 110:1 Denmark 2.2 million 46,000 48:1 France 4.0 million 38,000 104:1 Germany 6.0 million 40,000 147:1 Israel 2.2 million 29,000 76:1 Japan 2.4 million 35,000 67:1 Norway 2.6 million 44,000 58:1 Poland 0.6 million 20,000 28:1 Portugal 1.2 million 23,000 53:1 Spain 4.4 million 34,000 127:1 Sweden 3.4 million 38,000 89:1 Switzerland 7.4 million 50,000 148:1 UK 3.8 million 45,000 84:1 USA 12.3 million 35,000 354:1 22 4. Managerial environments 22 11  8/9/2024 Management application 4.4 Lincoln Electric in Germany and Mexico 1. Use the global management workplace framework discussed above to evaluate the nature of the conflict at Lincoln Electric. What emerges as the key issues needing to be addressed by management? 2. How did job and reward expectations, and perceptions of distributive justice, differ between the US and German operations at Lincoln Electric? 3. What could US and German managers have done to improve the motivational environment in the Germany operation? How successful do you think such an attempt might be? 4. What did the American managers learn from the German experience that they were able to apply in Mexico? Was it successful? 5. How do you think the psychological contracts in the United States, Germany, and Mexico differed? What was the effect of these differences on job performance? What was the effect of these differences on supervisory behavior? 23 4. Managerial environments 23 Women at work: Gender wage gaps (Exhibit 4.11) Country % wage Country % wage Country % wage gap gap gap Australia 15 Greece 12 Russia 37 Belgium 9 Hungary 12 South Korea 40 Canada 22 Ireland 20 Spain 17 Czech Republic 19 Japan 32 Sweden 15 Denmark 14 Mexico 16 Switzerland 22 Finland 20 New Zealand 6 UK 20 France 12 Poland 11 USA 21 Germany 24 Portugal 19 OECD average 18 24 4. Managerial environments 24 12  8/9/2024 Management application 4.5 The gender wage gap 1. Statistics suggest that women in China have greater opportunities on the management ladder than their counterparts in Japan, Korea, and other Asian countries. What might account for this difference? 2. When global managers are assigned abroad, what is (or should be) their philosophy on compensation policies? Should they abide by prevailing local wage patterns (e.g., paying women lower salaries than men doing similar work) or should they apply the equal-pay-for-equal-work policies that may prevail in their home countries? Why? 25 4. Managerial environments 25 Strategies for managing across cultures (Exhibit 4.12) 1. Learn about managerial 2. Explore situational 3. Develop culture-based role expectations and contingencies motivational strategies cognitions Take a serious look at Consider how cultural, Study variations in work values components of, and forces organizational, and managerial as they affect attitudes and within, various managerial work environments fit together behaviors. work eenvironments. to create unique challenges Explore how culture and Understand how culture and and opportunities for orgnizational processes organizations help shape managers. influence employee motivation managerial roles and Look for situational variations and performance. responsibilities. and how these factors might Understand the concepts of Understand variations in influence behavior, success, or fairness and distributive managerial thinking and why failure. justice--as seen by employees. these differences occur. Recognize diversity in developing incentive programs. 26 4. Managerial environments 26 13  8/9/2024 Key concepts cognitions managerial environment cognitive schemas psychological contract distributive justice situational contingencies dual management hierarchy work values free overtime karoshi 4. Managerial environments 27 27 Discussion questions 1-3 1. Research and experience both show that cognitive schema about the role of supervisors can differ across regions of the world. What is the implication of these differences for motivating employees in their home countries? 2. As a marketing representative about to meet a new potential client in a country different from your own, how can you learn more about the situational contingences facing that manager? 3. Work motivation across borders can be influenced by very different factors. If you were launching a new start-up, how would you accommodate these differences in your incentive and rewards strategies? 28 4. Managerial environments 28 14  8/9/2024 Discussion questions 4-6 4. Some countries (e.g., Denmark, Sweden) adopt more of a work-life balance than other countries (e.g., Korea, Japan). In an increasingly competitive global business environment, how will companies in Scandinavian these cultures compete over the long term? 5. Individual differences both within and between cultures have been discussed throughout this book. Is there an ethical concern if companies require their employees to adopt the work values of their leaders or leave the company? 6. Psychological contracts are based fundamentally on trust. For a company entering a new foreign market, what steps can it take to begin building such trust with its new local employees? 29 4. Managerial environments 29 Discussion questions 7-8 7. Employee motivation is often influenced by a combination of extrinsic and intrinsic rewards. While companies and managers have considerable control over extrinsic incentives, what if anything can they do to help build intrinsic incentives? Are global companies able to adjust intrinsic incentives between locations to accommodate local values and work practices? If so, how? 8. Toyota’s chief competitive officer, Didier Leroy, makes three times as much as his boss, Company CEO Akio Toyoda ($9.4 million vs. $3.5 million for 2019). Leroy is from France and previously worked for Renault. Toyota claims it offers pay that is “competitive” taking into consideration “the remuneration standards of each country and region.” What is your opinion about this pay differential and its effects on the company? 30 4. Managerial environments 30 15  8/9/2024 Discussion questions 9-10 9. Relating to the Lincoln Electric example in the text, how did the job and reward expectations—and perceptions of equity—differ between the American company and its German employees? What, if anything, could the American and German managers have done to improve the motivational environment in their German operation? 10. As a foreign manager overseeing a local factory, how might you seek to convince local workers and managers to increase the diversity of their workforce (e.g., more women, more minorities)? What local conditions might be conducive to your success? What local conditions might suggest imminent failure? 31 4. Managerial environments 31 Discussion questions 11-12 11.When global managers are assigned abroad, what should be their philosophy on gender and compensation policies? Should they abide by prevailing local wage patterns that may pay women lower salaries than men doing similar work or should they apply an equal-pay-for- equal-work policies that may prevail in their home countries but not locally? In other words, should global managers strive to play by local rules as defined by local cultures (i.e., particularism) or be agents of change as defined by their home-country beliefs and values (i.e., universalism)? 12.In your view, what are the three most important lessons from this chapter for global managers? Explain. 32 4. Managerial environments 32 16  8/9/2024 Closing thought... Will we manage and motivate the next generation of employees the same way we have in the past? If not, what will be different? 33 4. Managerial environments 33 17