Culture and Congruence: The Fit Between Management Practices and National Culture
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Abstract.Thefinancialperformance of EuropeanandAsianworkunitsof one multinationalcompanyis examinedas a functionof the congruence betweenmanagementpracticesand nationalculture.Using Hofstede's five nationalculturedimensionsand analogousmanagementpractices, we findthatworkunitfinancialperformanceis higherwhenmanagement practicesin the workunitare congruentwiththe nationalculture. Until recently,the dominance of American managementtheory led to the belief that "one size fits all," that a good managerin the U.S. will also be a good managerin othercountries,and that effectiveU.S. managementpractices will be effective anywhere.This view is now being supplanted with the knowledge that managerialattitudes, values, behaviors,and efficacy differ across national cultures. There is no one best way to manage a business. Differencesin nationalculturescall for differencesin managementpractices. This simple idea is surprisinglydifficultto accept. The currentdrive toward globalization makes it harder. Globalization leads to standardization.Big Macs are the same aroundthe world, but McDonald'smanagementpractices should not be. Just as Big Macs in Moscow are status and luxurywhile Big Macs in New Yorkare utilitarian,requisitemanagementpracticesdifferacross cultureseven whenproductsdo not. The fact that managementpracticesshould not be universalis illustratedby examples with which most managers are familiar. Pay-for-performance schemesarepopularand workquitewell in the U.S. and U.K. but are less used *KarenNewmanis Professorof Managementat GeorgetownUniversity'sSchool of Business. Her researchinterests include organizationalchange in Central and East Europe, ethical work climates,high performancework groups, and managerialcareers.Her work has been published in such journals as the Academy of Management Journal, Industrial Relations, Public Administration Review, and Human Relations. Professor Newman earned her Ph.D.
from the Universityof Chicago,GraduateSchool of Business.StanleyNollen is Professorof Managementat the GeorgetownUniversitySchool of Business.His researchincludeswork on the problemsand prospectsfor businessin emergingmarketeconomiesof CentralEurope and Asia; high performancework groups;and studiesof the processof forminginternational trade policy in the U.S. Congress.His articles have appearedin IndustrialRelations,International Organization, Human Relations, the Journal of Labor Research, and JIBS. This researchwas supportedby the participatingcompanyand by the GeorgetownUniversitySchool of Business,whosecooperationand assistancewe gratefullyacknowledge.CarlaInclan,KasraFerdows,Rob Grant, and JohnyJohanssonprovidedvaluablefeedbackon early drafts.Dawn Brand,Byron Crossen, HollyKramer,andSoominOmprovidedresearchassistance.Twoanonymousreviewersprovidedinvaluable guidance.All viewsexpressedas well as errorsof fact or interpretation are the authors'responsibilities. Received: November 1995;Revised: May & September 1996; Accepted: September 1996. 753
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