Managing Across Cultures
Internationalization of the economy has influenced companies to operate their business globally. The global operation has impact managers with several challenges. Market, product, and production plans must be coordinated on a worldwide basis. The global operation necessitates organization structure to balance centralized home-office control with adequate local autonomy. As companies have started their business operation on the international front, the number of their employees has increased. Increase in the employee’s abroad management is faced with new global challenges. The three broad international business management challenges were identified by the management gurus as follows (Robert, Kossek & Ozeki, 1998):
a) Deployment: To get the right skills where it is required in an organization regardless of the geographical location.
b) Knowledge and creativity distribution: Spreading the knowledge and practices throughout the organization regardless of where they have actually originated.
c) Talent identification and development on global basis: To identify who possess the ability to function effectively in a global organization and working on the development of such abilities.
When confronted with such challenges, organizations have had to reorganize policies and procedures for handling global assignments. It will require organization to go through thorough study of the cultural differences and cross-cultural values and principals, technical and language aspects which might require thorough training program.
Cross-Cultural Management of the organizations
Inter-country differences impact managerial as well as operational processes of the businesses. Pluralism, diversity and collectivism created differences in values, attitudes of the people thus creating its impact on the behaviors and reaction of the people from country to country. Economic factors and labor cost factors help determine whether business emphasis should be on efficiency, commitment building or some other strategy. Industrial relations specifically the relation between worker, the union and the employer manifest themselves to the adoption of global business processes.
Culture Theory and its determining factors
Culture in its broadest sense can be defined as the collectiveness of society’s idiosyncratic ideas, beliefs, values and knowledge. It depicts the ways human interacts and correlate with their environments. Cultural theory is related to the branches of social science, political science, sociology and communication. Cultural theory defines the core concepts of culture. Cultural studies often concentrate on the ways that relates to subjects of ideology, nationality, ethnicity, social class and gender (Serrat, 2008). Cultural theory takes all account of business like marketing, production and financial aspect into its dimension. In the global business culture leaves its traces on the policies, new-processes and management strategies.
Application of cultural theories
Wide-ranging cultural differences from country to country require corresponding differences in the management practices among company’s foreign subsidiary. The cultural theory intends to examine subject matters of different countries in terms of cultural practices and the power relationships. These theories understand the complex structure of cultural values and analyze the political and social impacts on it. The cultural theories are subjected to political criticisms and ethical standards. They tend to share knowledge within societies and equip people from different nations to be well aware of the norms, values, behavioral pattern and psychological patterns of these societies.
Cultural Variations in different parts of the world
For the purpose of comparing different cultures it’s important to analyze operative identities of different dimensions of culture across the nations and identify the similar aspects or dimension which is common to all culture.
A study conducted on the behavioral patterns of the managers from Hong Kong, the People’s Republic of China and United States conclude that U.S. managers are mostly concerned with getting the job done whereas Chinese managers were most concerned with maintaining a harmonious environment and the Hong Kong managers fell between these two extremes (Ralston, Elsass, Gustafson, Chenung & Terpstra 1992).
A study conducted by Professor Geert Hofstede had recognized other across-cultural differences in his study. The study has signifies that nations have different set of power needs thus societies power distance differs to the extent that the less powerful members of the institutions accept and expect that power will be distributed unequally (Hofstede, 1992). These inequalities are exhibited to greater degree in country like Mexico as compared to Sweden. Masculinity vs. femininity passes on to the extent to which society values assertiveness-masculinity vs. caring-femininity. Japan and Australia is among those countries that rank high in masculinity as compared to Denmark and Chile that ranked low.
Management studies have found that Mexican workers prefer formal working environment where managers and subordinates prefer to keep certain level of distance among them. However, the cultural environment of the United States organizatiuons is more of informal and friendlier (Schuler, 1996). Same studies have shown that individualism is not valued as highly as it is in United States. Consequently, workers don’t give as much importance on self-determination as the workers of United States and they expect to receive a wider range of services and benefits for themselves and their families.
Communicating Across the cultures
Another face of cultural theory is the communication across the cultures. In the global work place organizations are exposed to multiple cultures and diversity in workforce tent to be at the most. This diversity pushes organizations to build strong communication bridges across the cultures so that lack of communication can be avoided which can result in number of managerial and functional setbacks. Diversity in the workforce increases workforce creativity, expand the alternatives for solving the problems, decision can be made with views from different perspectives, flexibility in the organization increases and organization is moved towards more creative and learning center with talents and skills of people from different backgrounds.
The barrier is built in across-culture communication with the natural feeling of judgment and evaluation. Its natural urge that people tend to judge, evaluate and approve another person’s perspective. The disliking and disagreements are shown in negating others person’s point-of-view, his/her perception of something and not approving other person’s conceptual framework. This results in bad feelings, discouragement, lack of confidence and unpleasant relationship among people. In the daily routine social networking it is commonly observed that making evaluation by the people is very common in all form of communication. The consequences of these evaluations are intensified when they are associated with feelings and emotions. Stronger the feelings regarding the subject matter being evaluated the chances of creating mutual understanding between the communicating parties will be thinned (Roger, C., & Roethlisberger, F.J 1991).
Gateway to real and effective communication across-culture and avoiding these evaluative tendencies can be created when organizations workforce have the listening power and understanding strength. The paramount to this concept is the concept of empathy which means seeing the expressed ideas and attitude from other person’s perspective. This required understanding of the goals and objectives of the other person and their feelings associated with it. It is easy said than done. The philosophy of psychotherapy deals with it which involves building amiable relationship with people through better communication among them. The theory of psychotherapist works well with small group of people resolving issues or communicating on the matter of religion, racial or . Dealing with communication issue across-culture has more complex and formalized structure.
People from different backgrounds, experiences and motivations working in geographically dispersed locations have more complex communication challenges and understanding problems. Some school of thoughts have the opinion that when people from different backgrounds, motives and value sets communicate with each other it is more likely that they will not agree to the same point thus effective communication can’t be built between them. However, there is another school of thought which says that when both the parties have given freedom of expression they are more likely to build strong relationship exhibiting effective communication (Roger, C., & Roethlisberger, F.J 1991). People from different cultures when are free to express their feelings, opinions and between the workforce is build and outcomes are much better as compared to people of similar backgrounds communicating for results.
Avoiding cultural Shock through communication
Organizations when functioning globally have workforce from diversified backgrounds. If their values are not respected, they are not ethically accepted in the workforce and their experience is not valued then it can lead to a cultural shock and disturbance in the organization. Managers are not able to motivate their staff and work on their skills and abilities for the achievement of the organization’s goals and objectives. When there arises conflict in the organization due to cross-culture differences its wise enough to manage the communication through a moderator. A moderator’s role is to listen to the whole conversation non-evaluatively and with thorough understanding with unbiased views. The process of bridging communication gaps with the help of moderator can be imitated any time without waiting for the other party to take any action. For the success of this process it’s important that moderator at least gets cooperation from one of the party.
The moderator will be responsible to deal with the dishonesty, defensive attitude, embellishments and lies that have structures failure to communication. The defensive attitude is likely to be changed soon when the communicating party observes that the intension of the person is to understand not to make any judgments. In the communication conflict is one party drops in the defensive behavior the other party is likely to respond in the same way and the real essence of communication is then achieved. In this way mutual communication is created and problem is then defined in the more realistic terms. Thus, the solution to the problem then can be achieved through understanding, using creative alternatives and producing intelligent results. No matter how much complex is the problem and situation if it’s well communicated and understood among the parties involved it can be solved in the best possible time with minimum possible resources being waste.
Organizations dealing in global businesses have to make up the management policies especially the Human resource policy for skill development and human capital management. The process of expatriate management is itself very complex. Organizations need to decide who to deploy to an overseas assignment and how to pay that person. In this regard following issues needs to be addressed (Fadel & Petti, 1997):
a) Expatriate identification, assessment and selection: Besides the technical and business skills required, fundamental qualities necessary to consider for global assignments include for instance, cultural sensitivity, interpersonal skills and flexibility.
b) Cost estimations: the average cost of sending an employee and family on an overseas assignment is reportedly between three to five times the employees current salary. Consequently, quantifying total cost for a global assignment and deciding whether to use expatriate or local employees are important considerations in the employee budgeting process.
c) Assignment letters: The assignee’s specific job requirements and associated pay will have to be documented and formally communicated in an assignment letter.
d) Compensation, benefits and tax programs: Employees are compensated in variety of ways by including various forms of perks with their salary and the relocation allowance as well. The widely used approach to international pay include home-based plus a supplement and destination-based pay.
e) Relocation assistance: The assignee in many of the organizations will be assisted with matters like maintenance of person’s home and automobiles, shipment and storage of household goods.
f) Family support: Cultural orientation, language training, education assistance and emergency provisions are just some of the matters to be addressed before the family is moved abroad.
In such cases cross-cultural, technical and language training programs will be required. The complex and differentiated strategy of labor laws and rules from country to country and provisions for assembling the expatriates when they are done with the international assignment and returns to their home town will be addressed by the companies. Sending expatriates on the international assignment doesn’t end the story. It is organization’s responsibility to settle them back with their work in the home town when they return. Career development of expatriate is thus more complex and expensive as compared to local employees but it has to be well managed also in consent with the labor laws and regulations.
Building new organization in across-culture management
When organizations are spreading far and wide beyond boundaries to the remotest geographical location, the only survival factor for the organization is to transform itself to information-based organizations (Drucker, 1988). The pulling force in the employment is moving fast from manual and clerical workforce to knowledge societies where workers exhibit information sharing, creativity management, exhibiting learning abilities and improving on their skills and capabilities. They discourage the command and control model that have been evolved from the military times some 100 years ago and was being practiced in the organization as a managerial policy and procedure.
To have technological advancement is not necessary for the information based-societies. The transformation process involves innovation and rebuilding the structure of the organization from top to the bottom. The aspects which would be involved in the cross-culture transformation of the business environment will be:
a) Physical existence of the departments not required: The information-based organization will require more specialist as compared to the traditional organization. These specialists will be trained to function in the operational areas of the business irrespective of their headquarters location or their primary department locations. So it will not be necessary that the physical location of the department is where the work is being performed. Such organization will be an organization of specialist of various kinds. In the traditional organizations where majority of the strategic work was done on the top level and the bottom were suppose to follow the instruction of the top without giving their own contribution. In the information-based organization the real work will be done on the bottom level through specialist who will differentiate their work and direct themselves.
b) Information dissemination across the organization justly: The main requirement of information-based organization that structures organization across cultures is that everyone in the organization takes up information responsibility. This means that everyone in the organization will be contributing their thoughts for what information he or she needs to get the job done and to what extend he or she contributes for the process of information sharing and disseminating. Executives and specialist will be analyzing what information is available to them for their use and what information they will be producing for the application of their team mates. In this process knowledge about the job, business processes and cross cultural variation is very critical.
c) Professionalism in the : To foster professionalism in the cross-culture information-based organization, task forces are being assigned. These task forces are working as work-teams assigned with roles and responsibility, provided with special training to do the job and given the strategic policy and procedure to adhere to it. This created standardization within the organization functioning across-culture. In this way organization’s goals are achieved and outcomes can be measures more accurately (Tayeb, 1998).Workforce has well set network of communication with proper channels and levels of management defined. Work-teams are leaded by the team leader who is then responsible to senior executives and is answerable when any issue arises. The specialists are part of these work-teams functioning on the specialized assignments of the organization. (Tayeb, 1998)
The modern business enterprises are functioning in various parts of the world. In the global competitive business environment it has become extremely important for managers to be work specialist. These specialist exhibits high level of managerial and leadership skills. They need to chase their staff to preferred goals, which should motivate them to work effectively and timely. To ensure that teams are well motivated is essentially a matter of using the right kind of leadership skills and appropriate management style. At the same time, an understanding of the motivation process will greatly enhance the chances of their success. Organization’s value system is entrenched in its corporate strategies that reflect the company’s growth prospects and future survival. If the value system of the organization is weak its foundation is shattered and the pillars of goals, objectives and strategies will no longer be able to hold the company for a longer period of time. Cultures are not easily changed, so if company is faced with divergent cultures due to any reason, it has to prepare itself to manage across cultures by creating a new culture for supporting the new organization policies and strategies.
The exposure of cross-culture in the organization brings diversity in the system. Diversity is to be considered as strength of the organization rather than a threat. (MacCaskill, 2010). Pluralistic learning, knowledge sharing, information sharing, capacity building and skill development all these results from the proper application of diversity in an organization by thorough study of the cultural value system and encouraging cross culture communication. Building strong cross cultural communication system in an organization is primary to the success of any business operating in the global environment. The role of manager in such organization is to develop mutual communication system that foster understanding between the workforce and build strong relationship between them. In doing so leaders must realize different motivational factors across culture and their set of needs.
In the international business environment expatriate management is vital to the management process. This system required the management of the selection process, preparing them for the international assignments, giving them training, compensating them and managing repatriation. Expatriate brings with them wealth of knowledge, skills and experience in an organization but if this is not well managed it will not produce desired outcomes. There are many examples when it is seen that international assignments have failed. It has been due to poor selection of the candidate who doesn’t possess right type of skills that was required for the job, the candidate couldn’t adjust himself/herself to the international culture, the economic factor didn’t permit him/her to work well or the legal issues created barrier. Therefore for any international assignments it’s important for the organization to train the employee, collect all possible information about the international country of operation and having the consideration of the labor laws and employee issues.
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