Devising Practical Management Systems for Cross-Border Business - Essay Example

Assess the Usefulness of the Major Academic Literature on National Culture for Devising Practical Management Systems for Cross-Border Business Table of Contents Assess the Usefulness of the Major Academic Literature on National Culture for Devising Practical Management Systems for Cross-Border Business 1 Table of Contents 2 Introduction 3 3 Cross Culture Management 3 National Culture 4 Key Dimension of Culture 5 Theory of National Culture 8 Managing Business across National Cultures 9 Impact of National Culture in Cross Border Business 10 Conclusion 12 References 13 Appendix 15 Appendix 1 Corporate Cross Culture Evolution 15 Appendix 2 National, Comparative and Cross Cultural management 15 16 Appendix 3 Cultural Coordination Outline 17 “There are truths on this side of the Pyrenees which are falsehood on the other” – Blaise Pascal Introduction The differences of natural culture are vital; along with it impacts on the expansion of company, industry as well as economy. The significance of world economy had generated the mandate for managers in devising practical management system for cross border business and practice for working with people of dissimilar nations. Appendix 1 shows different dissimilarities in the relative significance of cultural diversity and subsequently, equally dissimilar difference in the most suitable methods for handling people around the world (Adler & Gundersen, 2008). Cross Culture Management Cross culture management defines organisational behaviour within nations and national cultures. It associates organizational behaviour in nations and cultures and most significantly, looks for recognising and developing the collaboration of co–employees, managers, officials, clients, dealers and union partners from different nations and cultures worldwide. Cross culture management increases the range of domestic management to embrace global and multicultural dynamics. Culture can be defined as something that is shared by entirely or nearly every followers of a specified communal group. The culture alignment of a civilisation reflects the complex interface of morals, attitudes, ethics and activities which are displayed by the associates (Adler & Gundersen, 2008). Figure 1 Influence of Culture on Behaviour Source: (Adler & Gundersen, 2008). National Culture Presently, there are almost 200 nations in the world and a few nations are more culturally identical compared to the others. Big nations such as Indonesia, India, China and Brazil encompass culturally diverse regions. Other culturally related regions belong ethically to dissimilar nations, for example, the situation in Africa. Thus, associating national culture is a sort of eloquent and revealing venture. National culture differs at the degree of value. The Hofstede scopes of national culture are embedded in insentient value, because values are learned in childhood and national cultures are remarkably steady along time. The amendment in national value is a substance of changing generations. With regard to organisational perspective the culture in organisation differs mainly according to level of performances. Organisational cultures are more apparent and simple to learn and unlettered compared to values that create the basics of national cultures. There are differences between national culture and organisational culture. While national culture fits to anthropology, organisational culture fits to sociology. The reason is that organisational culture is rooted in practice and it is to a certain degree, controllable but national cultures are embedded in values, and are assumed truths for business management (Hofstede, n.d.). Key Dimension of Culture According to several literature studies there is significant relation between business effectiveness and the greatness of the cultural influence. According to the observation of Lane & Beamish “Cultural differences among managers are frequently invoked as an explanation for the problems encountered in multinational organisations and in business organisation in foreign countries (Lane & Beamish, 1990, p. 87).” Numerous studies depicts that persons from varied culture differ in their understanding to moral circumstances, insights, ethical values and manners. According to Hofstede’s research of cultural framework about American and Taiwan accountants, it had been found that Taiwanese accountants alleged lesser amount of risk related with immoral practices which can have optimistic influence on in–groups and greater amount of risk with practices that have adverse influence on in–groups (Tian, 2004). Examining and recognising the central cultural values of nations can clarify the variances in moral decision–making and communication in the cross–border business. Hofstede had studied employees and established method of observing and labelling culture in terms of resemblances and variances of national groups on five dimensions. Fig 2: Hofstede’s Five Cultural Dimensions Source: (Tian, 2004). In the year 1998, Trompenaar and Hampden–Turner had developed “Seven Dimensional model of culture” to describe the national cultural variances in organisations and to display how dealing these variances in cross–business environment is a key challenge for global managers. Fig 3: Seven Dimensional Model of Culture Source: (Charles & Trompenaars, 2011). The above seven quandaries help managers to well recognise the cultures and minimise the number of cultural oriented misinterpretation and conflicts, thus decreasing coordination rates. The seven dimension model helps marketers to realise about behavior of customers in different nations towards similar product (Gooderham & Nordhaug, 2003). Theory of National Culture According to Waters (2001, p. 5) “Globalisation is a social process in which the constraints of geography on social and cultural arrangements recede and in which people become increasingly aware that they are receding and in which people act accordingly”. The globalisation is important for recognizing the national culture as it is connected with the cross border business. There are two theories of national culture one is ‘Convergence’ and the other one is ‘Divergence’ (Waters, 2001, p. 5). According to convergence school of thought, the customary values are swapped internationally by contemporary values due to renovation that comes along with the financial improvement and political variations. This theory suggests that gradually every national culture will unite towards a globalised culture, logically with converging monetary and political alterations (Caprar, 2007). The divergence theory of culture proposes the opposite thing i.e. customary values are independent of financial and political variations and national culture will remain despite such changes. In the cross–business literature, both theories have been considered at the degree of organisation and descriptive basis for what initiates work values in international organisations (Caprar, 2007). There is another theory of national culture named ‘Crossvergence’ which tells that national culture and workplace philosophies are combined which produce a new value system that can be found anywhere between ‘Convergence’ and ‘Divergence’ theory subject to which of the two systems are resilient (Caprar, 2007). Managing Business across National Cultures The cross cultural management elucidates the activities of individuals in organisation with workers and consumer inhabitants from numerous cultures. The aim of the literature on ‘national culture for devising practical management system for cross–border business’ is to define and associate organisational behaviour within nations and cultures, and recognise and develop the interaction among stakeholders globally. Managing cross border business implies observation and analysis of different countries’ culture and business and thus to understand the resemblances and variances. It implies: a. A general understanding of defining physiognomies of national organisation system, and b. The aptitude to differentiate between different organisations and to study from models of decent or bad practice. Appendix 2 shows the ways by which international companies responded to national differences. Managing across culture is a two way procedure which includes national and international workers and managers of dissimilar organisations in different nations. Handling the culture is a procedure of managing workers internationally. The process involves strategic approach whereby each worker is likely to ‘act locally and think globally’. Fig 4: The Process of Managing Across Culture Source: (Branine, 2011). Through this procedure, one can gain awareness about different national backgrounds in order to associate with them. Impact of National Culture in Cross Border Business In present day, organisations have to cope with the realism of cultural assortment not only in the global business but also within organisation. Current research shows that several businesses do not understand the philosophy of culture and the way of performing cross cultural business. Similar studies have also described that persons who are sent for intercontinental tasks often confront serious difficulties in accomplishing social association with individuals of foreign country. It impacts on the productivity of employees along with the business. To manage the dynamics there is need to know the variances between cultures, ways to develop associations by appreciating the dissimilarities and to develop and consent approach of every heads so that the organisational goal can be achieved (International Business, 2009). The greatest method to know and forecast how one culture is dissimilar from another is through a framework that associates them on significant extent. The six issues are 1. Association to the background 2. Relation among individuals 3. Method of action 4. Human nature 5. Time, and 6. Space The cultural coordination outline provides a significant instrument for associating culture with each other. Appendix 3 provides the cultural coordination outline. It displays comparisons and variances among cultures, and highlights insinuations for management. This information is serious for executing strategies across cultures in cross border business. Managers who are responsive of their own cultural method can expect areas of disagreement and possible knowledge during working with persons from other cultures. Those who formulate strategy and structure for international business can take the variances into mind (DiStefano & Maznevski, 2003). Conclusion Thus, in conclusion it can be said that national culture impacts on the cross border business much more compared to national business. Most of the philosophies of directing business remain equal for both national and cross border business but there are several added complexities that a personnel need to be aware and be trained to manage. It is vital to understand the theories and key dimensions of culture proposed by different researchers. Besides there is need to understand the ‘intercultural communication’. This is far more than learning the language. Learning ‘intercultural communication’ means knowing how cultural and business relationships are made and what makes societies more happy and how to avoid circumstances of conflict that disable others to look through the intention and manners that an organisation pursues for co-operation (International Business, 2009). References Adler, N. J. and Gundersen, A. (2008). International Dimensions of Organizational Behaviour. Cengage Learning. Branine, M. (2011). Managing Across Cultures: Concepts, Policies and Practices. SAGE Publications Ltd. Charles, H. T. and Trompenaars. (2011). ‘Seven Dimensions Of Culture’. Available at: http://www.provenmodels.com/580/seven-dimensions-of-culture/charles-hampden-turner--fons-trompenaars/ Accessed 6 August 2011. Caprar, V. D., 2007. Exporting Culture: The Impact of Multinational Corporations on Local Employees Experience of Cultural Identity. ProQuest. Di Stefano, J. J. & Maznevski, M. (2003). ‘Culture in International Management: Mapping the Impact’. Available at: http://media.ft.com/cms/d70a42ec-d933-11db-9b4a-000b5df10621.pdf Accessed 6 August 2011. Gooderham, P. N. and Nordhaug, O. (2003). International Management: Cross-Boundary Challenges. Wiley-Blackwell. Hofstede, G. (nd). ‘What is Culture’. Available at: http://www.geerthofstede.nl/culture.aspx Accessed 6 August 2011. International Business. (2009). ‘Cultural Impact on International Business’. Available at: http://edu.udym.com/cultural-impact-on-international-business/ Accessed 6 August 2011. Lane and Beamish (1990). ‘PW Cross Cultural Cooperative Behaviour in Joint ventures in LCDs’. Management International Review, 30, pp. 87 – 102. Tian, Q. (2004). A Transcultural Study Of Ethical Perceptions And Judgements Between Chinese And German Businessmen. Martin Meidenbauer Verlag. Waters, M. (2001). Globalization. Routledge. Appendix Appendix 1 Corporate Cross Culture Evolution Source: (Adler & Gundersen, 2008). Appendix 2 National, Comparative and Cross Cultural management Source: (Branine, 2011). Appendix 3 Cultural Coordination Outline Source: (DiStefano & Maznevski, 2003). Read More