CHAPTER 1 - CULTURE AND CROSS- CULTURAL MANAGEMENT transcript

We will now begin chapter one of the course cross-cultural management with the topic culture and management in a cross-cultural environment. This is a very important foundation for understanding how to work and manage effectively in environments that involve multiple cultures. This chapter has six learning objectives. These are the learning materials that students can refer to and use throughout this chapter. They will help you gain deeper insight into the topic culture and management in a cross-cultural environment and apply it effectively in your learning process.

After understanding what culture is and what its core characteristics are, the next question becomes, what shapes and influences the culture of an individual or a society? Culture does not exist in isolation. It is shaped and adjusted by multiple factors, ranging from the individual level to the societal level. The first factor is religion. Religion strongly influences value systems, perceptions of right and wrong, attitudes toward work, money, and social relationships.

Many moral values, ideas about discipline, and a sense of community are rooted in religious foundations. The second factor is national and ethnic identity. Each nation and ethnic group has its own history, experiences, and sense of identity, which shape distinct ways of thinking and behaving. This is why studies of national culture, such as those by Hofstede, Trompenaars, identify significant differences across countries.

The third factor is regional and local context. Even within one country, culture is not uniform. Regional differences create subcultures that influence communication styles, lifestyles, and work behavior. In addition, family and education play a foundational role in transmitting culture. Family is where individuals first encounter cultural patterns, while education reinforces and standardizes social values and norms.

Furthermore, social class, occupation, and gender also shape how people perceive the world and behave within organizations. Different social groups may develop different norms and expectations. Finally, economic, political, and legal systems create the institutional framework that shapes behavior and cultural values. Especially in international business and management settings, culture, therefore, is the result of the interaction among many factors.

To correctly understand human behavior in a multicultural context, managers must view culture in relation to its social and institutional environment, rather than simply treating it as an individual trait. In this slide, we focus on a very important point. Culture is not fixed or static. It is constantly changing. When we talk about cultural change, we are referring to the way value systems shift over time within a society.

What is considered right, important, or appropriate today may not hold the same meaning in the future. For example, in the past, staying with one company for many years was seen as a sign of loyalty. Today, Frequent job changes may be viewed as flexibility and personal development. However, culture cannot exist only in a state of change or only in a state of stability. It needs a balance between the two in order to develop.

If culture is too stable, people may resist experimentation and avoid accepting new ideas. This can limit creativity, innovation, and competitiveness, especially in a dynamic global business environment. For instance, in organizations where the old way is always preferred, employees may hesitate to propose new ideas because they fear risk and negative evaluation. On the other hand, if culture changes too quickly or too drastically, societies and organizations may become disoriented.

Norms can break down and people may lose a sense of core values to rely on. In such cases, change no longer drives progress. It can create instability and collapse. For example, when an organization repeatedly changes its values, slogans, and management style within a short period, employees may lose trust and no longer know the long-term direction of the company. Therefore, in management, the role of managers is not only to adapt to the current culture, but also to identify the forces that are shifting value systems.

Managers must anticipate how cultural change will influence the business environment, consumer behavior, and employee work patterns. For example, the rise of remote work has pushed many companies to shift from valuing time control to valuing performance outcomes. In other words, culture develops through a balance between stability and change, and a key competency for modern managers is to understand, monitor, and guide cultural movement, rather than viewing culture as something fixed.

Question for discussion, in your opinion, which organizational cultural value is changing most rapidly today? In the previous slide, we established that culture is always in motion. In this slide, we focus on the question, what factors drive cultural change over time? The first factor is economic change. When economic conditions shift, a society's value system also shifts. For example, during times of economic difficulty, values such as security, stability, and saving tend to be emphasized.

In contrast, when the economy is strong, people are more likely to value innovation, experience, and personal freedom. The second factor is the development of the education system. Education not only provides knowledge, but also shapes thinking patterns and value orientations. When education encourages critical thinking, creativity, and international integration, society gradually shifts from traditional values to more open and diverse ones.

The third factor is the growth of mass media. Media, especially social networks and global communication platforms, enables cultural values to spread rapidly across national borders. This creates opportunities for cultural exchange, while also presenting challenges for maintaining cultural identity. Another important factor is political change. Shifts in political institutions, policies, or ideologies can redefine which values society prioritizes.

For example, perceptions of individual freedom, civic responsibility, or the role of government. A further major driver is technological advancement. Technology changes how people work, communicate, and consume, which leads to changes in both organizational and societal culture. Remote work, for instance, has transformed traditional notions of workspace and working hours. In addition, government policies have a strong impact on culture.

Policies related to education, gender equality, the environment, or economic integration help guide and reshape social values. Finally, external influences, such as globalization, foreign investment, and cultural exchange, also shape cultural change. These forces cause culture to evolve not only internally, but through contact with new value systems introduced from the outside. For these reasons, cultural movement is the result of multiple interacting forces.

In management, it is crucial for managers to identify which forces are driving cultural change and to make informed decisions in a dynamic business environment. Here, we are not only discussing why culture changes, but focusing on a more important question for management, when culture changes, what aspects of the business environment change with it? The first area is products and services. When a society's value system shifts, customer needs and expectations shift as well.

For example, as consumers increasingly value health and sustainable lifestyles, companies must adjust their products, from ingredients and design to branding and communication. Next is technology. Changes in societal attitudes toward technology, such as acceptance of remote work, digital payments, or artificial intelligence, drive companies to innovate their processes and business models. A culture that is open to technology enables faster innovation.

The third area is the labor market. Cultural movement, especially across generations, changes the expectations of workers. Today, many people are concerned not only about salary, but also about purpose, workplace conditions, and work-life balance. Another important consequence is social relations in the workplace. Cultural change reshapes how people communicate, collaborate, and perceive authority within organizations.

Many companies are shifting from rigid management structures to more open forms that encourage dialogue and teamwork. In addition, attitudes toward the environment are strongly affected by cultural movement. As society increasingly values sustainability, companies must pay greater attention to social responsibility, environmental protection, and business ethics. Taken together, these changes highlight the critical role of managers.

Managers must identify meaningful cultural shifts, understand their impact on the market, and develop flexible responses to turn challenges into opportunities. Overall, cultural movement is not only a social issue, but a strategic factor in management and business. Successful managers are those who recognize cultural change early and act in a timely manner. We now move to the second section of chapter 1, organizational culture.

When people think about an organization or a business, they often focus on structures, departments, or work processes. However, there is another very important element that is less visible, organizational culture. Organizational culture refers to the shared values and beliefs that help members understand who they are, what they are doing, and how they are expected to behave in their daily work. First, organizational culture helps individuals clearly understand their roles, as well as the common rules and norms of the organization.

Because of culture, people do not always need to wait for instructions. They already know which behaviors are appropriate and which should be avoided. In this way, organizational culture influences human behavior quietly, yet very powerfully. In addition, organizational culture includes the operational principles, core values, and working atmosphere within the organization. For example, some organizations emphasize discipline and procedural compliance, while others encourage creativity and experimentation.

These differences not only affect work performance, but also employee engagement and motivation. Organizational culture is also reflected in habits, traditions, attitudes, and behaviors. How people interact with managers, handle mistakes, or collaborate in teams all illustrate the organization's culture. According to research in the materials, these elements gradually develop over time and become implicit assumptions, meaning that people follow them naturally without needing extensive discussion or explanation.

Moreover, organizational culture determines how an organization handles internal issues and how it interacts with the external environment, including customers, partners, and society. In a global context, where organizations operate across cultures, understanding and managing organizational culture becomes even more important to avoid conflict and enhance cooperation. In short, organizational culture is the way members relate to one another, work together, and interact with the outside world.

It is not just what is written in formal rules, but what actually happens every day. For this reason, organizational culture becomes a unique identity and a source of sustainable competitive advantage. After understanding what organizational culture is, we now move to a very important question. How does organizational culture become visible? In other words, how can we recognize the culture of an organization in practice?

First, the most obvious expression of organizational culture lies in its shared values. For example, does the organization emphasize quality? Does it prioritize performance outcomes? Does it value punctuality, discipline, and accountability? These values are not only communicated verbally, they are reflected in how employees are evaluated, rewarded, or disciplined. Second, organizational culture is expressed through the management philosophy and managerial orientation.

This relates directly to how the organization treats employees and customers, as well as leadership style. Some organizations are employee-centered, encouraging empowerment and creativity. Others rely on command and control management. Such choices clearly reflect the organizations cultural orientation. Another very visible expression is the organizational structure and systems. For instance, does the organization have many hierarchical layers or very few?

Are procedures rigid or flexible? According to studies on organizational culture, structure is not only a technical matter. It reflects how the organization views people and power within the workplace. Organizational culture is also revealed through the behavioral guidelines that shape employee conduct. For example, how should employees interact with customers? What level of collaboration is expected between departments?

These rules may be formally documented or may exist informally as everyone knows. In addition, culture appears in internal behavior norms, such as communication styles among colleagues, interactions between supervisors and subordinates, and the presence of rituals or routines in daily work. Some workplaces are formal and highly procedural, while others are informal and openly communicative. These differences create very distinct impressions when we enter an organization.

Finally, organizational culture is reflected in working standards. For instance, expected workload, pace of work, and the degree of collaboration between individuals and units. These serve as implicit standards, and if employees do not meet them, they may feel that they do not fit the organization. In short, organizational culture is not abstract or distant. It is clearly expressed through values, management style, structure, rules, and behavioral norms.

Simply by observing how people work together each day, we can recognize the culture of an organization. Now we move to a very interesting question. Where does organizational culture come from? Organizational culture does not appear overnight. It develops gradually through multiple influences. First, organizational culture is shaped by the traditions, structures, systems, and policies designed and imposed by leadership.

When an organization is first established, its leaders, especially the founder, tend to leave a strong imprint. For example, if the founder prioritizes discipline and results, the organization will build strict processes and performance-based evaluation from the beginning. Conversely, if leadership values creativity and flexibility, the initial culture will be more open, accepting experimentation and even mistakes. However, organizational culture does not come only from leadership.

It is also strongly influenced by employees themselves. Employee culture contributes to the formation, reinforcement, maintenance, and even transformation of organizational culture. This is particularly evident in organizations with egalitarian structures, where employees are encouraged to participate, share opinions, and propose new ideas. For example, in many technology companies, team-based work and open idea exchange emerge naturally from daily employee interactions, not only from leadership directives.

In addition, organizational culture develops through ongoing internal dialogue and adjustment. When an organization encounters problems, conflicts, or change, members communicate, negotiate, and gradually agree on new approaches. Over time, these approaches become habits and eventually culture. For example, in a company facing crisis, if leaders and employees engage in open communication, a culture of transparency and shared information will gradually take shape.

Finally, organizational culture is heavily influenced by the business environment. When the environment is stable, culture tends to maintain traditional practices. But when markets become more competitive or technology evolves rapidly, organizations must adapt and culture changes accordingly. For instance, many traditional companies once operated in a rigid manner, but as they moved into the digital environment, they needed to build a more flexible culture, accept remote work, and evaluate performance based on results rather than office presence.

In summary, organizational culture is formed by leadership, employees, internal interaction, and external environment. It is a long-term, dynamic process rather than something fixed. Understanding how organizational culture forms helps explain why every organization develops its own unique way of working. In this section, we discuss a very important relationship, the interaction between national culture and organizational culture.

First, it is essential to remember that no one enters an organization as a blank slate. Every member grows up within a specific national or ethnic culture, and they bring those values into the workplace. As a result, members of an organization, even when working for the same company, carry with them national cultural values such as perceptions of power, communication styles, attitudes toward time, and tolerance for risk.

These values directly influence how they work, collaborate, and make decisions within the organization. This leads to a key point. Employee cultural values can significantly affect organizational performance. For example, in cultures with high power distance, employees tend to wait for instructions from superiors and avoid questioning authority. In contrast, in cultures that emphasize equality, employees are more likely to express opinions openly and participate in collective decision-making.

This helps explain why the same management model may produce different outcomes across countries. However, it is also important to note that managers cannot change the national or ethnic culture of their employees. These values are formed early in life, shaped by family, education, and society, and therefore cannot be retrained in a short period of time. Effective management is not about changing national culture, but about understanding and adapting to it.

Similarly, organizations cannot easily change the deep cultural values of employees. Although organizations may introduce rules, norms, or policies, if these conflict with employees' underlying values, change will be slow and often met with resistance. On the other hand, when joining an organization, each member must also absorb its organizational culture to some degree. Through daily work, communication, evaluation, and reward systems, the organization gradually socializes employees, helping them adapt to common practices.

This is a two-way process. Employees adapt to the organization, and at the same time, the organization is influenced by the collective values of its people. In the end, we can see that organizational culture is always closely linked to national and ethnic culture. No matter how global a company becomes, its organizational culture still reflects the cultural context in which it was created and operates. Understanding this interaction helps managers avoid cultural conflict and build more effective workplaces in multicultural environments.

In this slide, we discuss a very common reality in today's organizations, cultural diversity. Almost no organization consists of people who all think, work, or value things in in same way. The question is not whether diversity exists, but where that diversity comes from. First, the most significant source of cultural diversity in organizations comes from the differences in employee and managerial culture. Everyone who joins an organization brings their own cultural background, national culture, regional culture, generational traits, education, and work experience.

These differences create multiple perspectives within the same organization. Second, diversity also emerges from the formation of groups within the organization. Departments, project teams, or professional units often develop their own subcultures. For example, the engineering team may work and communicate very differently from the marketing or HR team. These subcultures enrich organizational culture, but if not well managed, they may also create separation.

Another source of diversity comes from the consequences of organizational policies and changes. When an organization restructures, merges, changes strategy, or adopts new technology, old and new values and practices may coexist for a period of time. This makes organizational culture more diverse, but also increases the potential for conflict. In addition, external forces such as the market, laws, society, and technology strongly influence cultural diversity.

As the environment changes, organizations must adapt, and this adaptation often brings shifts in values and behaviors. Finally, in the context of globalization, many organizations are becoming increasingly internationalized. Employees come from different countries and work across different branches, carrying different cultural backgrounds. This is a major source of cultural diversity in modern organizations. In summary, cultural diversity in organizations stems from people, groups, policies, environmental forces, and globalization.

If managed well, this diversity becomes a valuable resource for creativity and performance. If ignored, it may become a source of conflict and inefficiency. In this slide, we are not asking whether cultural diversity exists, but rather how organizations respond to that diversity. According to research on management and organizational culture, especially in a global context, organizations tend to fall into four primary attitudes.

The first attitude is diversity blind. In this case, the organization assumes that everyone is the same and that cultural differences do not matter. This may sound fair and equal, but in reality, this approach leaves the organization unprepared to handle problems or capitalize on opportunities that arise from diversity. When conflict occurs, the organization often reacts passively and with confusion. The second attitude is hostility toward diversity.

Here, the organization attempts to standardize employees. Everyone must think and behave according to the same model. Cultural differences are seen as trouble and are discouraged or suppressed. This approach may create short-term stability, but in the long run it reduces motivation, limits creativity, and makes employees feel disrespected. The third attitude is naivety toward diversity. The organization recognizes diversity in a positive way and encourages open discussion, but lacks the skills and tools necessary to manage resulting issues.

When cultural misunderstandings or conflicts arise between groups, the organization often does not know how to respond, leading to reduced effectiveness. Finally, the attitude considered most effective is diversity integration. Here, the organization views diversity realistically and proactively. Rather than simply acknowledging differences, it helps employees develop the skills needed to manage diversity and creates conditions for effective communication and collaboration among groups.

In this approach, diversity is no longer a problem. It becomes a resource for learning, creativity, and organizational performance. In summary, cultural differences are neither inherently good nor bad. It is the organization's approach to managing diversity that determines whether it becomes a challenge or an advantage. We now move to the final section of chapter 1, multicultural management. We now begin introducing a very important concept, international management.

To put it simply, international management refers to managing an organization in a context where multiple countries are involved. Rather than operating within a single national environment, international management is a process in which managers apply management concepts and practices to a multinational environment. However, it is important to note that management approaches cannot be applied mechanically across all countries.

Managers must be able to adjust and adapt management solutions to match the cultural, political, and economic differences of each country. For example, a single HR policy may need to be implemented differently across countries. Communication styles, employee evaluation, and decision-making practices may all require adjustment. Without understanding the local cultural context, a policy that works well in one country may have the opposite effect in another.

In addition, international management involves developing strategy, designing and operating organizational systems, and working with people from different cultural backgrounds. The ultimate goal is not only to operate effectively, but to build sustainable competitive advantage in the global environment. In other words, international management requires more than knowledge of management itself. It also demands understanding of culture, people, and the international context.

This is why culture plays a central role in international management, and why it becomes a core theme of the chapters that follow. In this slide, we go one step further into the idea of multicultural management. If international management is about managing in a multinational environment, then multicultural management focuses directly on people and their behavior across different cultural contexts. First, multicultural management helps explain human behavior in organizations around the world.

Behaviors that appear normal in one country may be misunderstood in another. Multicultural management helps us recognize that these differences are not rooted in individuals themselves, but in the cultural environments in which they grew up and work. Second, multicultural management shows how to work effectively with people from different cultures. This is critical for managers, especially when working in multinational teams.

For example, communication style, decision-making processes, and performance feedback may all need to be adjusted to fit the cultural context of each group. In addition, multicultural management helps describe organizational behavior within different national and cultural environments. Allowing us to compare organizational behavior across countries, such comparisons are not about judging right or wrong, but about understanding differences and finding more effective ways to collaborate.

According to Nancy Adler, an important, and perhaps the most important, goal of multicultural management is to improve interaction among colleagues, managers, leaders, customers, suppliers, and partners from different countries and cultures. When these interactions improve, both work effectiveness and organizational competitive advantage increase. In short, multicultural management is not only an academic concept. It is a practical skill that enables managers to work more effectively in an increasingly diverse and interconnected world.