Influence of Indian National Culture on Organisations
National Culture can be defined as “ the collective programming of a group of people with common experiences, such as political and educational systems, at the national level ” referred to as “Software of the Mind” by Hofstede. Hofstede’s value dimension is a common approach for operationalizing national culture in terms of values.
Hofstede’s Five value dimensions of National Culture are:
Individualism-Collectivism
Power Distance
Masculinity- Femininity
Uncertainty Avoidance
Long Term Orientation
It is important to understand the Indian National Culture for those who wish to manage organisations in India, to understand what factors motivate employees in India in order for organisations to enjoy sustainable performance.
Studies show that managers are socialised by their own national culture, regardless of the management level in an organisation, and tend to develop values, beliefs, behaviours and practices that are compatible with the main features of that national culture.
INDIAN CULTURE VS WESTERN CULTURE
Traditionally, Indian culture is characterised by a hierarchical family system. This comes from the way people live in India, here people learn the essential themes of cultural life within the bosom of a family. In most of the country, the basic units of society are the patrilineal family units. There are family heads that take most decisions and look after the family. Loyalty to family is a deeply held ideal for almost everyone.
In contrast to this, the western family system is a nuclear type, where a couple live with their unmarried children and when the children marry they separate out of the family and form a separate nuclear family.
These characteristics of the family system have a strong influence on the thinking of the people of these cultures. This in a way influences the organisations & the managers in that culture. The comparison can be drawn between these two cultures as under:
Indian Western
Styles of Management Authoritative:
Society demonstrates a high power culture. Workers prefer authoritative and hierarchical forms of Management. They expect leader’s protection, concern & support. Democratic:
Managers place high importance on driving workforce towards self-initiative, creativity & Entrepreneurship.
Environmental Influences External Locus of Control:
Lack of positive reinforcement from society. Individuals believe that outcomes depend on fate or supernatural forces beyond human control. Internal Locus of Control:
Responsibilities & Accountabilities lie with the individual are responsible for the outcomes.
ORGANISATIONAL CULTURE: THE LINK TO MANAGEMENT PRACTICE
Socialization of Work Relationships
Gopalan & Rivera’s categories based on Kluckhohn & Strodtbeck
Value Orientations Indian Western
Human Nature Less efforts to improve one’s present situation, individuals believe that their present situation is as a result of their actions & lifestyles in previous birth. Individuals focus on improving their present situation, they believe that change in personality and lifestyle is in their control.
Man-Nature Individuals have an external locus of control; they subjugate themselves to nature. Negative impact on ambition, work ethic & persistence. Individuals have an internal locus of control; they believe that they can control nature and their own destiny.
Time Individuals oriented towards past and view time as an infinite entity, which causes tremendous pressures to conform to traditional practices and beliefs. Individuals focus on future, which translates into preference for planning, scheduling and a sense of urgency.
Relational Individuals prefer hierarchical relationships, may be a consequence of caste system & supported by it often extended to business leading to recruitment based on caste. Individuals tend to hire based on skill sets required for the work, dominating the particular industry.
India & Globalization
The globalization of business had a tremendous impact on life styles and role relationships in India. MNCs established operations in the closed economies and began to affect tradition and culture. Indian Managers are combining traditional values and dimensions of the contemporary global market imperatives in a unique way. Indian managers may not synergise divergent values in a terminal sense but may rearrange their work goals and related values in different layers at different points of time.
Indian organisations can be grouped as under
i) Western Industrialized firms including JVs/Subsidiaries of MNCs
ii) Family dominated firms maybe involved in JVs with Western Firms
iii) Indigenous Firms
iv) Private & Public Corporations
Impact of Globalization on the Indian firms:
Compared to domestic firms MNCs are more inclined to higher women, pay higher salaries & promote them to managerial positions.
Managers will develop hybrid or crossvergence approach to management which will combine indigenous and imported methods retaining an integral Indian value, thus maintaining and fostering an environment of trust necessary to build effective business relationship.
Equal employment opportunity practice may lead to hiring the most qualified person for a job, as opposed to preferential hiring of family members or relatives.
Increased competition of Indian firms with MNCs, which raised concerns about total quality management, workforce skills and pressure to change from indigenous, costly technology to more effective technology applications.
CHALLENGES & OPPORTUNITIES FOR GROWTH THROUGH RESOURCE ADVANTAGE
From the Organisation perspective India seems to be straddling two currents of economic development which can be explained by strategic management theory:
i) Resource Dependence: It involves accessing needed resource and capabilities from external sources. Resources may be accessed through alliances or joint ventures with MNCs, and can bridge opportunities with Indians working abroad with entrepreneurial and technical capabilities.
ii) Resource Based View of the Firm: Developing the resources into unique combinations internally. Indian firms can develop sustainable competitive advantages build rare, unique combinations for capabilities and resources.
The factors that support growth of industries in India rely on cultural adaptiveness. From a corporate cultural perspective the IT sector has affected Indian Capitalism, because the corporate culture and business practices of India’s IT firms are vastly superior to those of India’s Traditional business houses. The software industry makes extensive use of resources available to India, where it has comparative advantage. India produces the second largest annual output of scientists and engineers.
But acting as potential constraints or facilitators of these efforts are the macro issues of government, social tradition and national culture.
AN EXAMPLE OF CROSS-CULTURE MISMATCH: DAIMLER CHRYSLER
In May 1998, Daimler-Benz (German Organisation) and Chrysler Corporation (American Organisation), two of the world's leading car manufacturers, agreed to combine their businesses in what they claimed to be a "merger of equals."
Daimler-Benz was characterized by methodical decision-making while Chrysler encouraged creativity. Chrysler was the very symbol of American adaptability and resilience. Chrysler valued efficiency, empowerment, and fairly egalitarian relations among staff; whereas Daimler-Benz seemed to value respect for authority, bureaucratic precision, and centralized decision-making. These cultural differences soon became manifest in the daily activities of the company. For example, Chrysler executives quickly became frustrated with the attention Daimler-Benz executives gave to trivial matters, such as the shape of a pamphlet sent to employees.
Daimler-Benz executives were equally perplexed when Eaton showed his emotions with tears in a speech to other executives. Chrysler was one of the leanest and nimblest car companies in the world; while Daimler-Benz had long represented the epitome of German industrial might (its Mercedes cars were arguably the best example of German quality and engineering).
Daimler-Benz attempted to run Chrysler USA operations in the same way as it would run its German operations. This approach was doomed to failure.
DaimlerChrysler announced on 14th May 2007, that it would sell Chrysler to Cerberus Capital Management of New York, a private equity firm that specializes in restructuring troubled companies, effectively unwinding the original transaction. The de-merged German company will adopt the name Daimler AG. The US Company adopted the name Chrysler LLC when the sale completed on 3rd August 2007.
CONCLUSION
From the perspective of Organisational Culture and management practices, India is country in transition with vast potential and challenges, very significant accomplishments, but also respect for the past and social traditions. The key for organisations to succeed is the ability to integrate the traditional system into the modern outlook and form a hybrid strategy for management of the Indian Organisations
National Culture can be defined as “ the collective programming of a group of people with common experiences, such as political and educational systems, at the national level ” referred to as “Software of the Mind” by Hofstede. Hofstede’s value dimension is a common approach for operationalizing national culture in terms of values.
Hofstede’s Five value dimensions of National Culture are:
Individualism-Collectivism
Power Distance
Masculinity- Femininity
Uncertainty Avoidance
Long Term Orientation
It is important to understand the Indian National Culture for those who wish to manage organisations in India, to understand what factors motivate employees in India in order for organisations to enjoy sustainable performance.
Studies show that managers are socialised by their own national culture, regardless of the management level in an organisation, and tend to develop values, beliefs, behaviours and practices that are compatible with the main features of that national culture.
INDIAN CULTURE VS WESTERN CULTURE
Traditionally, Indian culture is characterised by a hierarchical family system. This comes from the way people live in India, here people learn the essential themes of cultural life within the bosom of a family. In most of the country, the basic units of society are the patrilineal family units. There are family heads that take most decisions and look after the family. Loyalty to family is a deeply held ideal for almost everyone.
In contrast to this, the western family system is a nuclear type, where a couple live with their unmarried children and when the children marry they separate out of the family and form a separate nuclear family.
These characteristics of the family system have a strong influence on the thinking of the people of these cultures. This in a way influences the organisations & the managers in that culture. The comparison can be drawn between these two cultures as under:
Indian Western
Styles of Management Authoritative:
Society demonstrates a high power culture. Workers prefer authoritative and hierarchical forms of Management. They expect leader’s protection, concern & support. Democratic:
Managers place high importance on driving workforce towards self-initiative, creativity & Entrepreneurship.
Environmental Influences External Locus of Control:
Lack of positive reinforcement from society. Individuals believe that outcomes depend on fate or supernatural forces beyond human control. Internal Locus of Control:
Responsibilities & Accountabilities lie with the individual are responsible for the outcomes.
ORGANISATIONAL CULTURE: THE LINK TO MANAGEMENT PRACTICE
Socialization of Work Relationships
Gopalan & Rivera’s categories based on Kluckhohn & Strodtbeck
Value Orientations Indian Western
Human Nature Less efforts to improve one’s present situation, individuals believe that their present situation is as a result of their actions & lifestyles in previous birth. Individuals focus on improving their present situation, they believe that change in personality and lifestyle is in their control.
Man-Nature Individuals have an external locus of control; they subjugate themselves to nature. Negative impact on ambition, work ethic & persistence. Individuals have an internal locus of control; they believe that they can control nature and their own destiny.
Time Individuals oriented towards past and view time as an infinite entity, which causes tremendous pressures to conform to traditional practices and beliefs. Individuals focus on future, which translates into preference for planning, scheduling and a sense of urgency.
Relational Individuals prefer hierarchical relationships, may be a consequence of caste system & supported by it often extended to business leading to recruitment based on caste. Individuals tend to hire based on skill sets required for the work, dominating the particular industry.
India & Globalization
The globalization of business had a tremendous impact on life styles and role relationships in India. MNCs established operations in the closed economies and began to affect tradition and culture. Indian Managers are combining traditional values and dimensions of the contemporary global market imperatives in a unique way. Indian managers may not synergise divergent values in a terminal sense but may rearrange their work goals and related values in different layers at different points of time.
Indian organisations can be grouped as under
i) Western Industrialized firms including JVs/Subsidiaries of MNCs
ii) Family dominated firms maybe involved in JVs with Western Firms
iii) Indigenous Firms
iv) Private & Public Corporations
Impact of Globalization on the Indian firms:
Compared to domestic firms MNCs are more inclined to higher women, pay higher salaries & promote them to managerial positions.
Managers will develop hybrid or crossvergence approach to management which will combine indigenous and imported methods retaining an integral Indian value, thus maintaining and fostering an environment of trust necessary to build effective business relationship.
Equal employment opportunity practice may lead to hiring the most qualified person for a job, as opposed to preferential hiring of family members or relatives.
Increased competition of Indian firms with MNCs, which raised concerns about total quality management, workforce skills and pressure to change from indigenous, costly technology to more effective technology applications.
CHALLENGES & OPPORTUNITIES FOR GROWTH THROUGH RESOURCE ADVANTAGE
From the Organisation perspective India seems to be straddling two currents of economic development which can be explained by strategic management theory:
i) Resource Dependence: It involves accessing needed resource and capabilities from external sources. Resources may be accessed through alliances or joint ventures with MNCs, and can bridge opportunities with Indians working abroad with entrepreneurial and technical capabilities.
ii) Resource Based View of the Firm: Developing the resources into unique combinations internally. Indian firms can develop sustainable competitive advantages build rare, unique combinations for capabilities and resources.
The factors that support growth of industries in India rely on cultural adaptiveness. From a corporate cultural perspective the IT sector has affected Indian Capitalism, because the corporate culture and business practices of India’s IT firms are vastly superior to those of India’s Traditional business houses. The software industry makes extensive use of resources available to India, where it has comparative advantage. India produces the second largest annual output of scientists and engineers.
But acting as potential constraints or facilitators of these efforts are the macro issues of government, social tradition and national culture.
AN EXAMPLE OF CROSS-CULTURE MISMATCH: DAIMLER CHRYSLER
In May 1998, Daimler-Benz (German Organisation) and Chrysler Corporation (American Organisation), two of the world's leading car manufacturers, agreed to combine their businesses in what they claimed to be a "merger of equals."
Daimler-Benz was characterized by methodical decision-making while Chrysler encouraged creativity. Chrysler was the very symbol of American adaptability and resilience. Chrysler valued efficiency, empowerment, and fairly egalitarian relations among staff; whereas Daimler-Benz seemed to value respect for authority, bureaucratic precision, and centralized decision-making. These cultural differences soon became manifest in the daily activities of the company. For example, Chrysler executives quickly became frustrated with the attention Daimler-Benz executives gave to trivial matters, such as the shape of a pamphlet sent to employees.
Daimler-Benz executives were equally perplexed when Eaton showed his emotions with tears in a speech to other executives. Chrysler was one of the leanest and nimblest car companies in the world; while Daimler-Benz had long represented the epitome of German industrial might (its Mercedes cars were arguably the best example of German quality and engineering).
Daimler-Benz attempted to run Chrysler USA operations in the same way as it would run its German operations. This approach was doomed to failure.
DaimlerChrysler announced on 14th May 2007, that it would sell Chrysler to Cerberus Capital Management of New York, a private equity firm that specializes in restructuring troubled companies, effectively unwinding the original transaction. The de-merged German company will adopt the name Daimler AG. The US Company adopted the name Chrysler LLC when the sale completed on 3rd August 2007.
CONCLUSION
From the perspective of Organisational Culture and management practices, India is country in transition with vast potential and challenges, very significant accomplishments, but also respect for the past and social traditions. The key for organisations to succeed is the ability to integrate the traditional system into the modern outlook and form a hybrid strategy for management of the Indian Organisations