Analysis and Comparison of Iranian and American Management; the Cultural Dimensions and Values Essay

This report is aimed to represent a brief description of the Iranian management values today and compare the results with a developed country like Unites State. First it will give a description of some of the characteristics of Iran management and culture, then it is tried to categorize these characteristic base on Hofstede’s Dimensions (1980) (power distance, avoiding uncertainty, masculinity/femininity, individualism/collectivism) and Flower’s dimensions, Flower 1975, (tribalistic, egocentric, conformist, manipulative, sociocentric, existential). In the next step will be presenting of relative information about United State and at the end the comparison between the results. Most parts of this report is focused on Iran management. IRAN The name ‘‘Iran’’ was used as early as the third century BC by a ruler who described his empire as Iran-shahr and himself as the ‘‘King of Kings’’. The country is highly diverse from every point of view, especially in topography and climate. The population of Iran is estimated at some 70 million, 12 million of which live in the capital Tehran and its suburbs. The official language of Iran is Persian (Farsi) which is an Indo-European language derived from Sanskrit. The country has one of the world’s most diverse ethnic groups ever assembled in one country: Persian (56 per cent), Turk (Azari) (24 per cent), Gilaki (8 per cent), Kurd (8 per cent), Lur, Baluch, Arab and Turkaman. The religious groups are Shiite Muslim, Sunni Muslim, Zoroastrian, Jewish, Christian and Bahaii. At the present, Iran is an Islamic republic, ruled according to a constitution providing for executive, legislative and judicial branches. The political system comprises both elected and un-elected institutions. Iran’s economy is a mixture of central planning, state ownership of oil, large enterprises, village agriculture, small-scale private trading and service ventures. All large industries and the majority of medium-scale enterprises are run by the public institutions particularly the foundations which were set up during the revolution. These entities own some 20 per cent of the country’s assets, and contribute 10 per cent of GDP (Khajehpour, 2000), however, they are generally mismanaged. Management in Iran Iranian management today is interesting firstly because the country is slowly opening up to the West after two decades of ignorance on the part of Westerners as to sides of life in Iran other than the political and religious aspects. Up till quite recently, the political discourse was dominated by the belligerent official language and images of mobs demonstrating in the streets against â€Å"the devils in the West†. Now after twenty years of austere clerical regime, the reform movement is gradually gaining momentum, especially among young people who have not known life before the Revolution. Secondly Iranian management is interesting because most people confound Iranians with Arabs, believing that what they learn about Arab countries is also valid for Iran, and this obviously is a misunderstanding. We begin our discussion with bringing some insights into Iranian society and its culture. Based on Hofstede’s findings (1980) Iran is classified in near Eastern cluster including Turkey and Greece. A more recent research found that Iran is part of the South Asian cultural cluster consisting of such countries as India, Thailand and Malaysia (Javidan and Dastmalchian, 2003). For a newcomer these findings may seem very different from the image of Iran as a predominant Islamic/Middle-Eastern country which is often confused with its neighbours. The point is that as a country situated in the Middle East, Iran has many commonalities with its neighbour Muslim countries; however, due to its unique historical, linguistic and racial identities it has a different and unique culture. Collectivism A very fundamental issue in every society is the priority given to interests of individuals versus those of collectivity. Hofstede (1980) views an individualistic society as one in which beliefs and behaviours are determined by the individual; whereas in a collectivistic society the attitudes are determined by loyalty towards one’s group. The manifestations of collectivism and social networking are very common in Iranian management. Personal connections and informal channels seem more practical, whereas formal systems, official institutions and procedures are considered less efficient and even bothering. As a direct result, Iranian society tends to perate rather on the basis of personal relationships among people, than on the basis of impersonal and mechanised institutions. The use of informal channels may imply bending rules and taking advantages to which one is not formally entitled. The popular Persian term for this practice and other forms of nepotism and favouritism is Partibazi, which is a common practice in Iranian organizations. For instance, it would not be unusual for Iranian managers to hire a relative or acquaintance for a job vacancy, even though they could easily employ a more competent but unknown worker. Collectivism has also a significant influence on the communication. An outcome of collectivism is the implicit and high-context communication in Iranian culture. Iranians from an early age learn to be careful about what they say and are advised to use an indirect language for expressing their intentions (Javidan and Dastmalchian, 2003). Persian language and literature are full of nuances and metaphors which should be interpreted in their context and cannot be taken at face value. A particular and very common form of indirect language in Iranian culture is Taarof which can be translated literally as politeness, but has a much more profound significance. In fact, Taarof implies a wide range of complicated and highly polite expressions/behaviours, which should not be interpreted literally. This kind of context-bound communication is very common in Iranian organizations in both written and oral forms. Power distance This orientation concerns the extent to which the less powerful members of a society expect and accept that power is distributed unequally. This orientation concerns the extent to which the less powerful members of a society expect and accept that power is distributed unequally. Results from Yeganeh and Zhan(2007) about ‘‘hierarchy’’ reflect the high degree of hierarchical distance among Iranian managers. Hofstede (1980) considers these characteristic as power distance in his research. The antecedents of this high hierarchical distance are deeply rooted in many aspects of Iranian mythology, history, politics, religion and family structure. Manifestations of high degree of hierarchical distance are various and numerous in Iranian management. A very clear example is the over-centralization of the capital Tehran. Despite the diversity and largeness of country, all administrative bodies and decision-makings are concentrated in the capital and other provinces should obey the resolutions. Other examples include top-down management, authoritarian decision-making (Javidan and Dastmalchian, 2003) and hierarchical structure of reward systems. For instance, there is considerable gap between compensation packages intended for people working at the top of organization and those working at entry levels. Managers consider it normal that people at higher levels have more privileges than those at lower levels. An outcome of hierarchical distance, combined with effects of collectivism and family-orientation is the dominance of paternalism in Iranian organizations, which is encouraged also by Islamic virtues. Schramm-Nielsen and Faradonbeh (2002) reported that Iranian employees expected superiors to help them in a variety of issues such as financial problems, wedding expenses, purchasing of new homes, illness in the family, education of children and even marital disputes. Past-orientation Results from Yeganeh and Zhan (2007) indicate Iranian managers tend to be past- rather than future-oriented. The orientation toward past may be crystallized in honouring indigenous managerial styles and their underlying foundations. After the revolution of 1979, there was much emphasis on substitution of modern/western management by traditional/Islamic work-related principles. Therefore, Iranian executives were urged to realign their managerial styles and practices to religious, social and political values of revolutionary ideology. Not surprisingly, most of these managerial styles were not based on rationality and progress, but on old-fashioned and obsolete views which were not efficient and practical. The past orientation can be manifested also in terms of neglecting plans or setting short-time horizon and also relative high uncertainty avoidance. High uncertainty avoidance means that members of the society feel uncomfortable with uncertainty and ambiguity and thus support beliefs that promise certainty and conformity. Activity orientation (being versus doing) According to Yeganeh and Zhan(2007) , ‘‘Activity Orientation’’ corresponds to masculinity dimension as described by Hofstede (1980). It is argued that in a ‘‘Doing’’ culture, people tend to view work activities as core to their existence, and they attach much importance to achievement and hard work. In contrast, in ‘‘Being’’ cultures peace of mind is cherished and emphasis is placed on immediate and unplanned actions. In reality, it is possible to witness demonstration of both ‘‘Being’’ and ‘‘Doing’’ orientations in Iranian society. For instance, a good deal of Persian literature is devoted to peace of mind, pleasure and frugality. Moreover, affected by Islamic culture, Iranians tend to view the world as an ephemeral step which does not worth hard work and which should be considered as a transitional phase toward eternal life and salvation. While these manifestations correspond to ‘‘Being’’ orientation, Iranians are known also for ‘‘Masculine’’ qualities such as individual achiever (Javidan and Dastmalchian, 2003), militant, hard-working and efficient. Bargaining Whereas doing business always means trying to negotiate the best deal in terms of price and related conditions anywhere in the world, this does not normally in the Western world extend to everyday little purchases. The bargaining represents a tradition that goes back thousands of years. According to this tradition the choice of dealer or business relation is an important one. The tradition is also that you bargain with your usual suppliers. The Western custom of shopping around for the best price and the best conditions is not well accepted. The obvious reason is that it breaks with the golden rule of trust. It takes time to build up a relationship based on trust, and so you need to have a long-term strategy and a lot of patience. Uncertainty avoidance High uncertainty avoidance means that members of a society feel uncomfortable with uncertainty and ambiguity and thus support beliefs that promise certainty and conformity (Daft 2003). According to Ali and Amirshahi (2002) results, the primary values of Iranian Managers are conformist. Flower’s dimensions Based on a research by Alishahi (2002) which was conducted through istributing twenty-two hundred questionnaires to a random sample of Iranian managers, the primary values of Iranian managers are conformist, sociocentric. Indeed, the outer-directed values (conformist, sociocentric, and tribalistic) are relatively dominant. This result may have its roots in the political and cultural reality. Since the Islamic revolution, Islamic values have been propagated. The emphasis has been on achievement and human dignity and on societal causes, rather than on personal material gains, in alleviating internal problems. Both dimensions reinforce conformity and sociocentric attitudes without discounting the existential outlook and personal growth. The Islamic regime constantly reminds the public about the outside threat and the need to sacrifice personal gains for the sake of society. In addition, the core philosophy of the regime is that the poor and unfortunate segments of the society must have access to political and economic opportunities. It should be mentioned too that the current Islamic regime condones both conformity and sociocentric outlooks. In an era of transition, managers may seek to avoid uncertainty by going along with the public pronouncements of the regime. Nevertheless, certain values differ across some variables, such as size of organization, ownership, managerial position, and father’s occupation. For example, manipulative managers were found in larger organizations and in the private sector. A typical manipulative manager relies on building a network of friends and supporters, and on careful political manoeuvres. Large corporations in Iran were public or had been nationalized after the revolution. Both have experienced profound restructuring in terms of power distribution and economic partnership. Perhaps this situation created opportunities for a new allegiance to seize power and gain influence. Sociocentric value is found among lower-level managers and those with peasant, working class, and clergy origins. Those with working and lower class origins, therefore, may have developed an awareness of the enormous social differences, and may nurture the feeling of belonging to â€Å"social classes† that have little or nothing in common with upper social classes. Perhaps this in turn creates a commitment to humanistic and community causes and strengthens the desire for a just society. United State management American culture is characterized by high individualism with loosely knit social frameworks. In individualistic societies, people are supposed to take care of themselves and their immediate families. Since individualism is high in the United States, work and accomplishments are viewed as person-centred. Thus, issues of individual meritocracy and perceptions of fairness are likely to be more pronounced among American employees. Materialism, according to Abdu K. (2004), conveys the idea that being affluent, prosperous and rich should be encouraged and suggests that a certain product or service will make the user well off. However, the simplistic approach, like in the USA, conveys the â€Å"just enough idea,† which emphasizes ego needs and self-actualization, rather than just material comfort. Pluralism refers to the degree to which national culture fosters simultaneous coexistence of different ethnic groups with strong identities. In a low pluralism culture, minority groups are completely absorbed by the dominant culture. The minority groups either completely replace their identities with those of the dominant culture, or retain weaker cultural linkages with the dominant cultural group. High pluralism on the other hand characterizes simultaneous coexistence of diverse ethnic groups with strong identities. Both Iranian and American culture is non-pluralistic or ethnocentric. Ethnocentrism means that people have a tendency to regard their own culture as superior and to downgrade other cultures. In both countries cultural differences are unified into a coherent, universal work culture. Diverse groups are absorbed into the mainstream work culture to create uniform work norms, beliefs and values. In such a non-pluralistic culture, minority communities have weak identities and legitimacy. Thus, the in-group–out-group ideology may not be as prominent in non-pluralistic cultures as in pluralistic culture. Rather than compete with minority cultures, the dominant culture aims at absorbing the minority cultures. Ethnocentrism within a country makes it difficult for foreign firms to operate. Based on a research by Alishahi (2002), prevailing dominant values in the U. S. are, (egocentric, manipulative, and existential; 60% inner-directed). United state is characterized by low power distance a relatively high tolerance for uncertainty and emphasizes shared power and authority, with team members working on a variety of problems without formal guidelines, rules, and structure. Many workers in Iran expect organizations to be hierarchy.