Impact of Power Distance free essay sample

According to Hofstede (1983) there are three reasons caused why nationality is important to management. The first reason is political because Nations are political units, rooted in history, with their own institution: forms of governments, legal system, labor and employer’s association system. The second reason why nationality is important for management is sociology because nationality has a symbolic value to citizens. And, the last reason why nationality is important for management is psychological because thinking is partly conditioned be national culture factors. Therefore, there is a relationship between management and national culture and it has become clear that national and even regional cultures do matter for management. The convergence of those factors defines, as outlines by Hofstede (1983; 2001), the concept of power distance: The relationship between superior and a subordinate in a hierarchy, including its values component, a measure of the interpersonal power or influence between the superiors and their subordinates as perceived by the less powerful of the two, subordinates. In an organization, the level of power distance is related to the degree of centralization of authority and the degree of authority leadership. This relationship shows that centralization and autocratic leadership are rooted in the mental programming of the member of a society, not only of those in power but also of those at the bottom of the power hierarchy. Hofstede (1983) explains that some countries show large power distance index score such as The Philippines, Venezuela, India, France and Belgium. On the other hand, some countries such as Denmark, Israel and Austria tend to score low. In addition, according to the relationship between power distance and collectivism; collectivist countries always show large power distance, but individualist countries do not always show small Power Distance. For example, France, Belgium, Italy and Spain show a combination of large Power Distance plus Individualism. The other wealthy Western countries all combine smaller Power Distance with Individualism. All poor countries are Collectivist with larger Power Distances. Thus, the combination of high individualism and low power distance yields a face-to-face interaction, involving boss (supervisor, manager, or leader) and one (or, at most, a few) of his or her subordinates. This approach to participative has dominated the North American decision making literature; its jargon (including the acronym participative decision-making and the term of employee involvement) is seldom used in relation to other participation approaches. Whereas the essence of face-to-face participation is the direct consequence of both cultural dimensions, other sociocultural variables affect the remaining attributes. Typically, American companies emphasize performance-oriented and profit-driven goals (Hofstede, 1980a); here, face-to-face participative decision making is primarily conceived as a means of maximizing profits. Law et al. (1992) reported that three-fourths of their sample of CEOs used participative methods in order to improve quality of work output. Face-to-face participative decision making is a direct boss-member interaction; hence, the employees themselves rather than their representatives such as trade union are involved in the decision-making process. Considered to be a means for the achievement of work goals, this approach concentrates more on the task itself than on the relationship between superior and subordinates. Even though investigated most systematically in the USA, the face-to-face participative decision making is not limited to this country’s borders. According to Hofstede (1980a) this form is more common in English-speaking countries sharing the American individualism or collectivism and power distance patterns than in other regions of the world. He found that British and American managers expressed very similar attitudes toward employee participation, sharing information, and employee’s self-leadership and self-control that differed considerably from the attitudes of managers from twelve other countries in Europe, Asia, and South America. Also, in Australia, Lansbury and Davis (1992) found that, whereas collective participative decision making remains sporadic here, firms frequently use face-to-face participative practice to involve employees in work decisions. Collective participative decision-making Collective participative decision making is an alternative approach to employee participation. This approach combines low or medium individualistic orientation with low or medium power distance. The previous form implies an emphasis on groups rather than sole individuals; this form implies the management and the workers’ group sharer intangible power and authority throughout the decision-making process. Even though this combination of cultural dimensions appears in various regions of the world, it is more widespread in several countries in Western Europe, such as Germany, Sweden, and Norway. Collective participative decision-making is an institutionalized involvement of employee representatives in decisions that are relevant to labor-management relations. According to Hyman and Mason (1995), collective participative decision making is either state or employee initiative that ‘promote (s) the collective rights of employees†¦ possibly in the face of employer resistance’ (p. 21). This approach differs substantially from the previous one; it is rooted in the labor relations literature that emphasizes the labor-management conflicting goals, whereas the face-to-face approach is grounded in the field of organizational behavior and highlights the person-organization goal congruency. Moreover, as opposed to the direct, face-to-face interaction, collective participative decision making implies an indirect involvement of workers in the decision-making process through work councils, consultative committees, worker directors, or even delegates who are non-members of the workplace such as trade union. According to Sagie and Aycan (2006) collective participative decision-making does not focus, therefore, on the employer and employees’ work-centered common goals such as working methods or productivity; it might be extremely difficult to talk on these issues in the course of an industry-wide collective bargaining. Conversely, this mode of participative decision-making is employee-centered and deals with such issues as compensation, fringe benefits, work conditions, and job security. Paternalistic participative decision-making The next type of participation is paternalistic.