Hofstede’s Organizational Culture Model

Hofstede et. al. (1990) outlines six core organizational practices that differentiate organizations in their management orientations: (1) process versus results; (2) employee versus job; (3) parochial versus professional; (4) open versus closed systems; (5) loose versus tight control; and (6) normative versus pragmatic. When negotiation parties come from organizational cultures that differ on these dimensions, their methods and practices adapted towards communication, goal achievement, power structures, and expectations tend to differ as well. These differences can have a potentially detrimental effect on negotiation proceedings, particularly when they lead to conflicting behaviors and

perceptions. Each of Hofstede’s six core organizational practice dimensions will be briefly described below.

2.1.1 Process versus Results

The process versus result orientation dimension opposes organizational concern for means with a concern for goals. These orientations reflect an organization’s approach to tasks and activities, in addition to the degree of homogeneity (Cullen and Parboteeah, 2005). Process cultures emphasize low risk and repeating known methods, which is characteristic of mechanistic organizations. These types of organizations focus on rigid division and allocation of tasks to achieve the highest possible level of efficiency. Results oriented cultures place a premium on taking risks and finding new methods. They are more characteristic of organic organizations which focus on the overall task, allowing variation in the organization of sub-tasks.

One potential drawback of a results orientation is that it may limit an organization’s ability to develop long-term inter-organizational relationships. The logic behind this argument is that an organization that focuses primarily on results might lack the necessary patience and understanding that is needed in developing meaningful and long lasting relationships. In terms of negotiation, this may cause problems when a results-oriented negotiator is paired with a process -oriented negotiator. For example, if a negotiator from a results-oriented culture like the U.S. is paired with a negotiator from a process-oriented culture like China, problems and misunderstandings may ensue. This is typically due to the conflicting orientations and expectations. On the one hand, the results-oriented negotiator will be more concerned with short-term, measurable results. On the other hand, the process-oriented negotiator will be more concerned with the method and process of the negotiation. It is therefore important that negotiators be sensitive and aware of the cultural influences that an organization has on its members.

2.1.2 Employee- versus Job-Oriented Cultures

This dimension relates to a personal or impersonal workplace distinction, contrasting a concern for people with a concern for getting the job done. Employee cultures perceive individuals as valued assets, and assume a broader responsibility for their members’ well-being. Members of these cultures tend to avoid direct disagreements or criticism of one another. Job-oriented cultures typically regard employees more as units of production, and are more concerned with the task at hand. These cultures are primarily concerned with employees’ job performance, and the completion of tasks. Disagreements are ruled out and suppressed rather than settled (Pugh and Hickson, 1989).

Walter (1999) posits that an organizational atmosphere that fosters good

interpersonal relationships will also help to attract and retain employees who are good at establishing and maintaining relationships with external constituencies. This will typically have a positive affect on negotiations and negotiation outcomes. Conversely, an

organization that focuses more on the task-related issues (de-emphasizing the importance of employee and personal relations) may lack the patience and disposition to create and maintain strong external relationships.

In negotiations, different orientations on this dimension can lead to conflicting communication methods as well as different expectations of the negotiation process. For example, an employee-oriented culture may spend more time on the non-task stages of negotiation in order to build rapport and develop a meaningful relationship, whereas a job-oriented culture may prefer to get right to the task stages of the negotiation. Similarly, when negotiators come from organizational cultures that are more relation-oriented, they tend to blur the distinction between superior and subordinate. Job-oriented cultures, however, are more likely to maintain these lines of distinction. As a result, differences in this dimension can result in conflicts due to opposing styles of superior-subordinate interaction and misunderstandings regarding the distinction between personal and professional lives.

2.1.3 Parochial versus Professional

The parochial versus professional orientation dimension analyzes organizations based on whether employees derive their identity from the organization or from the type of job, which corresponds to internal versus external frames of reference (Hofestede et. al., 1990). The parochial approach to management emphasizes conformity and collective purpose. Control in these types of cultures is established over members’ system of beliefs and perceptions, creating a relatively high level of goal congruence and a shared sense of duty. Members in parochial cultures identify strongly with their company as the basis for their employment and even their social status. They members usually extend organizational norms beyond the or ganization’s boundaries and into their personal lives. In professional cultures, however, members identify more with their skill-set and occupation rather than their organizations. They generally consider their personal life to be private, keeping organizational norms outside of their personal arena. Members of professional cultures adhere primarily to professional standards, regulations, and norms – rather than those of their organization (Cullen and Parboteeah, 2005).

These two different forms of governance are suitable, in contrasting environments – making one set of objectives and practices irrelevant in the alternative context (Ouchi, 1980). More specifically, the parochial culture is a ‘clan’ type approach best suited to environments characterized by intense competition, homogeneity, and a need for efficiency. It reflects a system of bureaucratic control that minimizes risk and enhances efficiency. A professional culture, on the other hand, is a market-driven approach that is best suited for more innovative, specialized environments.

Negotiators from parochial organizational cultures will likely rely on more collective decision-making than those from professional organizational cultures. This is a result of the strong emphasis that parochial organizations place on conformity and congruency. Since negotiators from professional organizational cultures are less team or group-oriented, they will likely adopt a more independent, autonomous decision-making approach to the negotiation.

2.1.4 Open versus Closed systems

The open versus closed systems orientation differentiates organizations based on their communication climate. In an open system, members commonly communicate with ease, both internally and externally. In addition, open system cultures tend to acclimatize new employees more quickly into the communications and social fabric of the organization (Cullen and Parboteeh, 2005). In a closed system, however, communication is more constrained, and there tends to be a greater degree of secrecy and exclusion of certain members – particularly newcomers. This system is generally characterized by a high degree of formalization and strict adherence to lines of authority.

In negotiations, the open-closed dimension of organizational culture plays an integral role in relationship and trust building, adopted strategies and tactics, as well as perceptions of negotiation parties. Open systems tend to be more conducive toward building and maintaining high-quality external relations, since they typically encourage joint problem solving approaches. Closed systems, on the other hand, tend to create an environment of suspicion and distrust due to a higher degree of secrecy and exclusion. This frequently leads to negative negotiator affect and less than optimal negotiation outcomes.

2.1.5 Loose versus Tight Control

This dimension of organizational culture classifies organizations based on their degree of internal structuring, formality, and management control. On one end, loose control organizational cultures tend to be more laissez-faire, allowing members a higher degree of autonomy and control over their work (Pothukuchi et. al., 2002). On the other end, tight control cultures emphasize a more structured and formal management style.

Members in these types of cultures are expected to adhere to strict standards, procedures, and proscribed behavioral norms. Loose control cultures are generally found in more organic organizations whereas tight control cultures are found in more mechanistic ones.

Differences between control orientations have a major impact on patterns of

communication, causing interaction problems between negotiating parties. Patterns of communication often become rigidly circumscribed and formalized, fostering negative attitudes, suspicion, and dissociat ion between groups with different control orientations (Putnam and Poole, 1987). Organizational cultures characterized by loose control are generally more flexible, and willing to relinquish some control over the negotiation process.

However, organizationa l cultures that are more tightly controlled typically have a harder time compromising, and relinquishing control. This reluctance to adjust, and lack of flexibility frequently leads to serious problems in the negotiation process, which negatively affects negotiation outcomes.

2.1.6 Normative versus Pragmatic

The normative versus pragmatic orientation dimension distinguishes rule -oriented organizations from customer-oriented organizations. It describes the prevailing way, whether flexible or rigid, of dealing with the environment and external customers.

Normative cultures are primarily concerned with doing things properly from an ethical or procedural perspective (Cullen and Parboteeah, 2005). As a result, these cultures tend to be more rigid in their emphasis on strict observance to rules and procedures. They are typically more concerned with how things get done rather than the results themselves.

Pragmatic cultures, however, are primarily concerned with results. They are comparatively more competitive, market-driven, and results-oriented than normative cultures.

In the negotiation setting, this dimension has a major affect on how negotiation parties perceive one another and how they perceive the negotiation process itself.

Pragmatic negotiators will place a greater degree of concern on the agreements stage of the negotiation. They will typically prefer to get right to this stage, without wasting too much time on non-task and task activities. Normative negotiators, however, will likely be preoccupied with following the sequential stages of the negotiation process. Different orientations on this dimension may have detrimental effects on negotiations, particularly in terms of conflicting procedural expectations and practices.

The position of an organization on these dimensions is determined in part by the business or industry in which the organization operates. Another important factor in influencing an organization’s position on these dimensions is its stage in the ‘life cycle.’ As organizations mature and develop, so do their cultures and their relative positions on these dimensions. The degree to which negotiating parties differ on these dimensions has an important impact on negotiation proceedings, negotiator predispositions, as well as expected negotiation outcomes. Thus organizational culture similarities and dissimilarities are important considerations prior to negotiation proceedings.