Influence of Social Culture and Industry Culture on Organizational Culture

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Influence of Social Culture and Industry Culture on Organizational Culture Niloofar Namjoofard
Global Challenges
B7521
Argosy University
Fall I, 2012
Dr. Nkemeh

Relationship Between Social Culture, Industry Culture and Organizational Culture
According to Briscoe & Schuler global organizations try to offer products and services with lowest costs, highest quality and shortest time of delivery to wherever demand is sufficient. They provide the resources from wherever the best quality for cost can be found. House, Javidan & Dorfman (2001) stated that the global locations of organizations with the growing cultural diversity of the workforce, have led to lots of challenges for organizations.

"A better understanding is required to determine how employees from societal cultures with different values and cultural practices perceive the identity of the organization for which they work, as well as to learn how those perceptions can foster more effective identification with the organization. Understanding diverse cultural perspectives has become critical not only for recruitment and retention, but also for maximizing employees’ contributions to and identification with the organization" (House, Javidan, & Dorfman, 2001). Albert & Whetten ( 1985) suggested global companies must understand the influence that multiple cultural point of views may have on employees’ understanding of the organization’s identity such as those characteristics considered to be the most core, enduring, and distinctive in order to help for more effective connections between the corporation and its members. Souday A. and Kunda (2003) stated that the impact of societal culture on organizations has been examined from a different viewpoints such as leadership, management practice, and organizational culture. According to these authors "societal culture includes the culture of the country in which the global organization is located, as well as the societal cultures of the organization’s employees. While countries and societies play a major role in the construction of social reality in organizations in global organizations, within a national culture multiple social identities do exist".

An example of the social culture's influence on organizational culture and industry culture is for China. According to Pei, M. (2012) the rapid growth rate in China has increased the level of development, raising the status of China from a low-income economy to a lower middle-income economy. Chinese social structure has become more diverse and plural because of the large change from the rural sector into modern sectors and to the emergence of new industries and growth of various professions. Economic modernization has created various emerging service professions, such as accounting, law, information, financial services, and the real estate. Increasing professional specialization has led to the fast emergence of a middle-class.

Rapid expansion of access to information made Chinese society more informed which has resulted to changes in cultural values. The new values, which are adapted from the west such as purchasing behavior and consumption. "An analysis that compares the contents of commercial advertising in China and the United States revealed two common values: modernity, youth (Cheng and Schweitzer, 1996)". Chinese culture has been affected by Western culture. Hence, "traditional Chinese culture, influences sensitivity towards foreign brands in a positive way, while modern, characterized by the value of youth and modernity, also promotes sensitivity to foreign brands for Chinese consumers"( LI, Ch. 2012).

A different perspective has been taken by the GLOBE (Global Leadership and Organizational Behavior Effectiveness) research project that concentrates on the relationships between societal culture, organizational culture, and leadership. Hofstede’s (1980), Trompenaars and Hampden-Turner,...
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