International Business - Impact of National Culture on Homogenous Working - Literature review Example

Impact of National Culture on Homogenous Working Impact of National Culture on Homogenous Working Recently, there have been discussions on the tendency towards the emergence of a globalized business environment arguing, "That an identifiable and homogenous group is emerging at least in the world business today.” However, the effect on globalized business environment by cross-cultural interaction has been an area of interest to many cross-cultural researchers. According to Triandis (2004, 67), managers are pushing for a homogenous method of work. However, cultural differences hold back the method. Currently, the most common way to study and make conclusions about organizational behaviour across cultures and explain the differences that exists relies using Hofstede’s framework. Professor Geert Hofstede conducted research on how values in the workplace are influenced by culture, perhaps even the most comprehensive study. Bulmer and Solomos (1999, 34) argue that if an organization wishes to adopt a homogenous culture among themselves, they may have to come up with a reliable culture of management to achieve it. National culture can be an inhibitor to achieving a homogenous ‘way of working’ since people may not want to change their practices. Hofstedes research was essential to current cross-cultural research being carried out. Despite critiques pointing out some of the drawbacks in his research, his research has significant use in the study of organizational behaviour. His research is essential for analysing homogeneity in current organizations. The essay aims at analysing the impact of national culture on an organization. The question the essay aims to answer is how does national culture impact homogeneity in international organizations? Is it possible to attain a homogenous management strategy in an international organization? The essay aims at proving that that cultural difference hinders the homogenous method in an organization. Culture According to Brookes, M. et al. (2001, 6), one of the difficulties that cross cultural researcher’s faces arriving at the definition of culture, given the myriad of definitions and dimensions that describe the concept. Baskerville (2003, 78) defines culture as the values, norms, beliefs, and behavioural patterns of a group. These may be people in a society of national culture, staff in an organization, in organizational culture context and even specific profession for a professional culture. Definitions of culture varies; Bliese (2001, 8) defines it as a human made part of the environment. Chan (1998) defines it as ‘a shared meaning system. Bommer, Rubin & Baldwin (2004) posit that culture is very complex and difficult to define. He argues that a culture consists of several elements, where some are implicit, and others explicit. Often, explanation to these elements takes place using terms such as behaviour, norms, values, and basic assumptions. Some researchers have referred to culture as tacit or implicit artefacts such as ideologies, basic assumptions, coherent sets of beliefs, shared sets of core values, a collective will, and important understanding Chen & Bliese (2002). Others argue that a culture includes explicit observable cultural artefacts such as practices and norms and symbols. They also include language, ideology, myths, rituals, and ceremonies (Cole, & Bedeian 2007, 89). Despite the several definitions provided by researchers, they agree that culture has the following characteristics: Culture is learned. Culture has a historical dimension. Culture has different layers. Culture is a collection of individuals who share common values, practices, ideas, beliefs and norms. Discussions of societal culture and the relationship to organizations are mainly focused on management practices and organizational culture in the GLOBE search. According to Combs Crook and Shook (2005), a societal culture mainly consists of commonly experienced language, ethnic heritage and ideological beliefs such as political and religion. Hofstede Framework Geert Hofstede founded and established the personnel research department of IBM Europe in 1965. Between 1967 and 1973, Geert conducted a large survey on the national values differences across the wide-reaching subsidiaries of a multinational organization. He compared answers from 117,000 IBM matched personnel on the same survey in diverse countries. He began with 40 countries and later extended to 50 countries. This was probably the largest and most famous matched sample of a cross-cultural research database available. The initial research identified four dimensions. They are power distance (PDI), masculinity individualism (IDV), (MAS) and uncertainty avoidance (UAI). Hofstede explains that the dimensions regard and relate to four anthropological problem areas that national societies deal with differently. There are ways of dealing with inequality, coping with uncertainty, relationship of individuals with other groups as well as the emotional implications of ones gender. In 1980, Hofstede published his research in ‘Culture’s Consequences,’ a book that analyses statistical information from the survey and his explains his personal experiences. Although every country chooses their own management system, they do not necessarily reflect the countries national culture. Conger and Kanungo (1997) argue that subcultures are able to create a cultural imperialism. Cross-cultural researchers have discussed this subject only from the perspective of one’s cultural dominance over the other countries, not from the perspective of one culture being dominant over the other culture. Choosing the levels of analysis in Hofstede’s theory was the most important challenge facing the framework. Despite the framework’s scrutiny, it is still significant in the cross-cultural study. The cultural dimensions of Hofstede’s research are as follows: Power distance: This dimension refers to how they treat the inequality. Inequality is there in every community. Some of the societies allow the people to grow apart so that the inequalities can grow. This will result in a difference in terms of power and wealth. Eventually, the inequality becomes a norm in the community. The dimensions reveal the dependence among the organizations. In communities where there exists a low power distance, subordinates have a limited dependence on their superiors. They do not need constant consultation on initiatives and hence there is interdependency. The subordinates often disagree with their superiors. In countries with high or distinct power distance, the situation is contrary. Subordinates have high dependency on their superiors, and they do not often disagree with their superiors. Uncertainty avoidance: Uncertainty avoidance index dimension is regarded with the capacity of a society deal with the future risk possibilities. The dimension describes attempts of societal members to acquire a certain position where they feel they are in a conflicting situation. Cultures with a high UAI have people who are structured. They behave as expected and want to know what happens in the future. Societies with high UAI tend to more emotional. They attempt to minimize the chance of occurrence of the unexpected by executing plans and implementing the set rules, existing laws and the outlaid regulations. In contrast, societies with a low UAI are in unstructured situations and environments and prefer to have few rules to govern them. Individualism versus Collectivism: The dimension occurs among people having a sense of belonging and identifying themselves with a group. Individualism takes place in people who have weak relations. In such societies, everybody is expected to look out for themselves and their families. Additionally, the stress rests on personal achievements in addition to individual rights. On the contrary, collectivism takes place in a society whose people join influential and integrated groups. These groups preserve their members due to their unlimited faith in their unity. Masculinity versus Femininity: This dimension denotes the roles that exist between genders. The values of a masculine culture are materialism, assertiveness, power, ambition, and competitiveness. On the other hand, feminine cultures value relationships and the quality of life. In this regard, masculine cultures, the differences in gender roles are more striking and less fluid. In the feminine cultures, men and women have the same roles and emphasize modesty and caring. Due to the result of taboos by many cultures, especially, masculine ones, and due to the gender generalizations portrayed by Hofstede, users of Hofstedes work often rename the dimension, for example, ‘quantity of life versus quality of life. Long-term orientation versus short-term orientation: It was initially known as the ’Confucian Dynamism.’ It describes the societies’ time horizon. Societies oriented towards the long term have more importance for the future. They have pragmatic values that orient towards rewards, including saving and capacity for adaptations and persistence. Importance of the Model According to Chad (2005), culture is more often a source of conflict than unity. Cultural differences are often a disaster. Despite the information, technology today that results to a convergence phenomenon by forming a "global village,” cultural differences are still significant and diversity increases. Therefore, in order to have respectful and trustworthy cross-cultural relations, we have to know of the cultural differences. With the framework, Hofstede provided these differences. The research can be a tool that provides the approximate understanding and indulgent of other cultures and a general overview. It shows us what to expect and how we should act and behave towards societies from other countries. Applications of the theory Some cross-cultural researches refer to Geert Hofstede as one of the best sociologists of culture in the international business context. Practical applications of his framework developed almost immediately. According to Conger & Kanungo (1997), the following are the research’s application: International communication: Communication remains one of the most primary concerns of business. Therefore, for people who work internationally, who interact on a daily basis with other people from diverse cultures, Hofstede’s model stretches and gives insight to their culture. Cross-cultural communication requires one to be aware of societal differences affected by the cultural dimensions. Cross-cultural dimensions affect all levels of communication, verbal and non-verbal, and etiquette do’s and don’ts. International negotiation: In international relations, expectation, communication style, goals, issue ranking will change in accordance with the negotiators’ state of origin. If applied in a proper way and in accordance to the set standard, the understanding of cultural differences should increase the success in international negotiations and reduce conflicts and frustrations. Hospitality and small talks with preferences in protocol should establish a good relationship in international relations or negotiations. International management: For any good management, decisions made by authority have to be considerate on the countries customs and values. Managers working in international companies may provide for training to all their employees with the intent of making them sensitive to international differences with conventions across realms or countries. Hofstedes dimensions provide an understanding of the acceptable methodologies to corporate establishments. As part of the public domain, Hofstede’s work attains application in several consultancies around the world. International marketing: The five dimensions are applicable in marketing as they define national values in both general and the business context. Since companies try to sell products and try to adapt them to the new environments, they need to understand and comprehend the specificity of their target market. In generally, Hofstede’s work is about understanding the organizational culture of international countries. Due to the research, as we have seen, we can apply his framework to understand different aspects of the international business. Therefore, we can use it to understand why national culture constraints the homogenous way of working. As indicated earlier, cultural differences are a significant source of conflict in any organization. The way to show this is by understanding how cultural differences cause this. Research is carried out to understand how cultural differences provoke differing managerial methods. Different national culture certainly discourages homogeneity. Patricia Sybolt and Susan Bolt illustrate in their work "The role of National Culture and Performance in Understanding Interpersonal Conflict in Global Organizations." The aim of the research and conducting the study lay in understanding the role of culture in interpersonal conflict. They studied the cognitive and interpersonal processes by which the culture of origin influences managerial behaviour in global organizations. Their argument was that culture creates a social context as well as a perpetual frame within which information is interpreted, intentions are inferred, interventions are made, and prospects of the future are assessed (Chan 1998). According to Currall, Towler, Judge& Kohn (2005), culture of origin or national culture has two contexts: as a social context which helps interpret behaviour by providing generating behaviour and providing information and as perceptual frames or cognitive mechanism in the mind of the perceiver. Referring to Sybolt and Bolt (2004) research, they studied conflict in two different cultures differed. For instance, according to their research, conflict between two French workers was perceived to be more serious and engendered less optimism that did the same kind of conflict in the US between two North Americans. Interpretations diverged between the members of the two cultural groups. French participants perceived conflict as less serious and the subordinates’ performance less likely to improve. These results concur with Chan, (1998) notion that the interpretation and meaning which individuals impute to conflict situations is influenced by culture dimension. Their results are not very inconsistent with Hofstedes (2001, 90), depiction of cultural differences, at a societal level, between French and US citizens. Firstly, the relationship between the manager and the employee can be created in two social contexts. In France, the psychological distance may lead a manager to have little hope for employees improved performance without the managers intervention. Secondly, the US employees optimism regarding improved performance and their disinterest in additional information relative to the French participants showed differences in preferred levels of uncertainty. According to Currall, Towler, Judge & Kohn (2005), the level of interpersonal behaviour, individuals (especially global managers) needs to understand reliable cultural distinctions and judge when such differences are relevant and meaningful in a managerial context. The research from Sybolt and Bolt (2004­) shows that it is difficult for any international organization to attain a homogenous management. Different cultures call for different managerial methods. For an organization that operates locally, there may be subcultures that are present in their respective countries. This phenomenon might also demand different managerial methods in the same organization, in different locales with different ethnicities. Previous research Different researchers adopted different kinds of leadership assessment tools and cultural models to conduct their studies. Matviuk (2007) conducted an empirical study on the correlation of cultural dimensions with leadership behaviour expectations among 122 managers of production plants in Mexico. The findings of the Canonical relation analysis (CCA) showed that specific interactions among the dimensions of culture correlate with specific interactions of the dimensions of the leadership behaviour expectations. Other researchers have conducted cross-cultural research to gain an understanding of comparative management practices in cultures. Goodens (2003) revealed that a national culture correlates with transformational leaders practices, therefore, concluded that practices must be compatible within the culture that each leader operates. Zargozel, Jacklic and Stough (2004) executed a study on comparative leadership practices by using LPI self-developed by Kouzes and Posner. It was administered to 100 MBA US students, 105 MBA Nigerian students, and 105 MBA students from Slovenia. Hofstede’s model was also utilized to identify differences in terms of national cultural aspects. According to their findings, practices such as Inspires Shared Vision, Contributing Mission, Encouraging the Heart, as well as challenging the process may be universally practised. However, practices such as enabling others to Act and Modelling the Way are culturally contingent. They concluded that the culture has an impact in the management, but is not so strong in ‘global village. Aimar and Stough (2007) conducted another cross-cultural study in Argentina and the United States. They too utilized Kouzes and Posner’s LPI instrument. They administered it to MBA students of two different countries. An analysis of their data showed to what extent leadership practices were culturally contingent. Muenjohn and Armstrong (2007) carried a study on Thai subordinates who worked under Australian expatriates to determine the relationship between work-related values of the subordinates of the host nation and the leadership behaviour exhibited by the managers. They used Hofstedes model to determine cultural values to determine the Thai subordinates cultural values while the MLQ was utilized to measure the leadership behaviours of the Australian expatriates. According to their findings, there was no significant impact on transactional, transformational and non-leadership behaviour. However, they found that there was the exception of a small positive impact of power distance on transformational leadership. Cross-cultural researchers have studied cultural values and leadership practices in another aspect. The aspect majorly involves job satisfaction. Macheno-Smoak (2009) conducted a study to investigate an individuals self-analysed perspective about how work related cultural values and level of job satisfactions affect ones propensity towards transformational leadership behaviour. Their findings suggested that self-assessment was high on uncertainty avoidance, low on power distance, and low on job satisfaction and high of collectivism. Their analysis also showed that cultural values correlate with the LPI scale for transformational leadership behaviour. Conclusion Evidently, from previous research carried out on organizational behaviour in accordance with national culture, management varies from country to country. 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