HC 1
Globalization theory
Language, trade and cultural barriers become less important
Within multinationals worldwide diffusion of technologies, knowledge and information
Economies growing together Convergence of world economies
“Real” differences between countries (language, culture etc.)
Perceived differences between countries (observable differences)
Three processes of social identity formation:
Social categorization; boys vs girls, black vs white
Social comparison; ranking system
Social identification; who do you want to be/not to be
(Self-)categorization: what is the salient category?
notable, important
Positive stereotyping of ‘in-group’, negative stereotyping of ‘out-group’
Nationality differences are particularly salient when people have no common history
Nationality then becomes a source for one’s own identity and for the identity ascribed to the other
Why is international management different from management tout court?
Cultural, institutional and language differences persist
Leading to differences in management and organization
Nationality forms an important basis for social categorization processes
Leading to cognitive shortcuts like cultural attribution and stereotyping
With the effect that management and organization differs between countries and doing business across
borders is different than domestic business
Liability of foreignness, differences in characteristics of the home country and characteristics of the host
country, is caused by distance
Contingency/Globalization Theory; stress universal factors across countries
Culturalist/Institutionalist Approach; stress uniqueness of countries
Contingency Approach: characteristics of management & organization depend on task environment and
related contingency factors (technology, size of the organization, environmental turbulence)
Set 1: mass production, large, stable
Set 2: piece or process production, small, turbulent
When looking for the influence of differences in
institutional/cultural environment, always control for
differences in contingency factors
,Globalization Theory; four possible scenarios
1) Convergence of economies
2) Greater specialization of economies
3) Incremental adaption
4) Hybridization
Institutional approach:
The humanly devised constraints that structure political, economic, and social interaction. They consist
of both informal constraints (culture) and formal rules
Culturalist Approach:
Characteristics of management and organization are influenced by basic values, norms and beliefs which
differ between social groups.
Two different approaches:
1) Quantitative, looking at dimensions (“etic”)
2) Qualitative, looking at unique characteristics (“emic”)
, HC 2
Institutions change only slowly, like culture
Different institutions in different countries
Institutions influence management & organization
Differences between US Europe (also within Europe) East (China/Japan)
Formal institutions vs Informal institutions
‘Hard’ institutions ‘Soft’ institutions
Laws, rights Taboos, tradition
Why instutions?
People are not fully rational, we should always make choices. Not always optimizing, but more thinking
about proper choice (people perspective)
Also importance of having legitimacy: the general perception that the actions of the organization are
desirable, proper, or appropriate within some socially constructed system of norms. Following rules
you’ll be seen as legit (company perspective)
Organizations need to be technically efficient and socially accepted to survive
Demands from institutional environment conflict with efficiency considerations
Why?
1) They are obliged: coercive processes (dwingend)
2) It’s right thing to do: normative processes
3) They see it as the self-evident thing to do: mimetic processes
do what others do
All these cases, institutional pressure leads to isomorphism (similarity of the processes or structure of
one organization to those of another)
There’s a tension between isomorphism as a result of coercive, normative or mimetic, it’s only superficial
Regulative; formal rules and regulations Formal
Normative; informal norms, values Informal
Culture – cognitive; shared beliefs, heuristics
Regulative institutions: inside our mind (internal)
Normative ‘ ‘: inside and outside (internal and
external)
Cultural – cognitive: outside (external)
Beliefs: outside (external)
Values:
as – the – desired: outside (external)
as – the – desirable: inside and outside
Institutions become more international homogenous. What’s the effect on management & organization?
Different existing national practices gave different directions to implementation
Globalization theory
Language, trade and cultural barriers become less important
Within multinationals worldwide diffusion of technologies, knowledge and information
Economies growing together Convergence of world economies
“Real” differences between countries (language, culture etc.)
Perceived differences between countries (observable differences)
Three processes of social identity formation:
Social categorization; boys vs girls, black vs white
Social comparison; ranking system
Social identification; who do you want to be/not to be
(Self-)categorization: what is the salient category?
notable, important
Positive stereotyping of ‘in-group’, negative stereotyping of ‘out-group’
Nationality differences are particularly salient when people have no common history
Nationality then becomes a source for one’s own identity and for the identity ascribed to the other
Why is international management different from management tout court?
Cultural, institutional and language differences persist
Leading to differences in management and organization
Nationality forms an important basis for social categorization processes
Leading to cognitive shortcuts like cultural attribution and stereotyping
With the effect that management and organization differs between countries and doing business across
borders is different than domestic business
Liability of foreignness, differences in characteristics of the home country and characteristics of the host
country, is caused by distance
Contingency/Globalization Theory; stress universal factors across countries
Culturalist/Institutionalist Approach; stress uniqueness of countries
Contingency Approach: characteristics of management & organization depend on task environment and
related contingency factors (technology, size of the organization, environmental turbulence)
Set 1: mass production, large, stable
Set 2: piece or process production, small, turbulent
When looking for the influence of differences in
institutional/cultural environment, always control for
differences in contingency factors
,Globalization Theory; four possible scenarios
1) Convergence of economies
2) Greater specialization of economies
3) Incremental adaption
4) Hybridization
Institutional approach:
The humanly devised constraints that structure political, economic, and social interaction. They consist
of both informal constraints (culture) and formal rules
Culturalist Approach:
Characteristics of management and organization are influenced by basic values, norms and beliefs which
differ between social groups.
Two different approaches:
1) Quantitative, looking at dimensions (“etic”)
2) Qualitative, looking at unique characteristics (“emic”)
, HC 2
Institutions change only slowly, like culture
Different institutions in different countries
Institutions influence management & organization
Differences between US Europe (also within Europe) East (China/Japan)
Formal institutions vs Informal institutions
‘Hard’ institutions ‘Soft’ institutions
Laws, rights Taboos, tradition
Why instutions?
People are not fully rational, we should always make choices. Not always optimizing, but more thinking
about proper choice (people perspective)
Also importance of having legitimacy: the general perception that the actions of the organization are
desirable, proper, or appropriate within some socially constructed system of norms. Following rules
you’ll be seen as legit (company perspective)
Organizations need to be technically efficient and socially accepted to survive
Demands from institutional environment conflict with efficiency considerations
Why?
1) They are obliged: coercive processes (dwingend)
2) It’s right thing to do: normative processes
3) They see it as the self-evident thing to do: mimetic processes
do what others do
All these cases, institutional pressure leads to isomorphism (similarity of the processes or structure of
one organization to those of another)
There’s a tension between isomorphism as a result of coercive, normative or mimetic, it’s only superficial
Regulative; formal rules and regulations Formal
Normative; informal norms, values Informal
Culture – cognitive; shared beliefs, heuristics
Regulative institutions: inside our mind (internal)
Normative ‘ ‘: inside and outside (internal and
external)
Cultural – cognitive: outside (external)
Beliefs: outside (external)
Values:
as – the – desired: outside (external)
as – the – desirable: inside and outside
Institutions become more international homogenous. What’s the effect on management & organization?
Different existing national practices gave different directions to implementation
