Cross-Culture Management - Essay Example

Cross-Culture Management Company mentioned in this study is planning to expand business operation in countries like China, Nigeria and Brazil. In such context, objective of this paper is to study potential opportunities and challenges regarding international expansion plan of the company. Contingent issues regarding cross cultural management for the company has been discussed in this paper. Literature review has been conducted by the study for identifying opportunities and challenges regarding cross cultural management. These opportunities and challenges are being validated in context to practical scenario of the company. Based on the research findings, suitable recommendations are being made at the last section of this research paper. Table of Contents Table of Contents 3 Introduction 4 Theoretical exploration of Potential Opportunities/Challenges 4 Practically Relevant Scenario 9 Conclusion and Recommendation 11 Reference List 12 Introduction In modern business environment, multinational enterprises (MNEs) need to manage cultural diversity while expanding business in different countries (Zhang, 2009). In order to explore true benefits of globalization, companies need adjust team dynamics, organizational structure and organizational environment in context to cross cultural elements (Jamal, 2005). Consideration of research works of Cullen (2002) and Dong and Liu (2010) reveals the fact companies need to manage cross cultural elements in dynamic as well as responsive manner in order ensure success for all of its strategic business units. While expanding business internationally, multinational enterprises (MNEs) and domestic companies can avail certain benefits such as decreasing business risk by diversifying business portfolio, accessing larger customer base, accessing the source of reverse innovation, fuelling innovation through cross country knowledge transfer and others (Lysonski and Durvasula, 2013; Derlega et al., 2002; Friedman, Chi and Liu, 2006). In similar context, company selected by this research paper is also planning to expand its international operation in countries like China, Brazil, and Nigeria. Home country of the company is UK and most of the managers as well as employees of the company have become habituated with British culture. In such context, while expanding business in countries like China, Nigeria and Brazil, the company will bind to face challenges regarding difference in cultural orientation of these countries from UK based culture. While working in managerial position in HR department of the mentioned UK based company, author of this essay is being asked to produce an internal report for the management that addresses the potential opportunities and possible challenges when seeking to expand the cooperation internationally (Chen and Francesco, 2000 and 2003; Gelfand et al., 2001). It is being expected that the company will shift local managers to handle responsibilities China, Nigeria and Brazil. Due to lack of exposure to cultural orientation to these countries, these expatriate managers might face cultural conflict and challenge in managing local employees in strategic business units of China, Nigeria and Brazil who share different cultural orientation. Theoretical exploration of Potential Opportunities/Challenges Yang et al. (2000) and Yang (2006) pointed out that cultural difference between countries are being directed customs, religious practices, traditions and social practices. De Dreu and Weingart (2003), De Dreu (2006) and De Wit and Greer (2008) conducted Meta analysis in order to find difference in cultural orientation of people in different countries. They found that performance, attitude of people towards work and organizational behaviour differs significantly with change in cultural orientation. In such context, historical origin and theoretical underpinning of different concepts need to be analyzed in order to develop functional background of the discussion. Research works of Guetzkow and Gyr (1954) and Hall (1955 and 1966) can be considered as one of primary research works in the field of cultural study. Hall (1955 and 1966) tried to understand cultural orientation of people on the basis of their anthropological origins. From 1950’s to 1970’s, most of the researchers used concepts and postulates of anthropology to understand dimensions of different cultures across different countries in the world. During that period, literature regarding cross cultural management was partially developed. Such gap in the literature regarding cross cultural management was fulfilled with the introduction of seminal research works of Hofstede (1980, 1991 and 1993). In the last 34 years, Hofstede (1980 and 2000) and Trompenaars (1993) conducted comprehensive as well as rational studies to understand dynamics of cross cultural management by identifying specific cultural dimensions. Hofstede (1980 and 1993) identified 5 cultural dimensions while Trompenaars (1993) identified seven cultural dimensions. According to Nibler and Harris (2003), Trompenaars’s (1993) model was derivative from Hofstede’s (1980) model. Therefore, for sake of originality, the study will consider Hofstede’s (1980, 1991 and 1993) cultural dimension theories for shedding light on cross cultural management. In the Hofstede model, five cultural dimensions are identified as masculinity/femininity, uncertainty avoidance mentality, long-term as against short-term orientation, collectivism as against individualism and power distance between people. Modern scholars like Zakaria, Amelinckx and Wilemon (2004) criticized culture dimension models for being too rigid to be applicable in knowledge driven organizational environments. According to these scholars, knowledge driven organizations have clusters of people who belong to different cultural background and therefore, identifying different cultural dimensions within a single organization becomes difficult. Apart from such criticism, most of the scholars have found all the five cultural dimensions are pretty significant in organizational studies (Chen, Tsui and Farh, 2002). Based on above discussion, difference in cultural orientation in UK culture as against other target cultures of China, Nigeria and Brazil can be compared on the basis of five cultural dimensions such as masculinity/femininity, uncertainty avoidance mentality, long-term as against short-term orientation, collectivism as against individualism and power distance between people. While performing cross cultural management, company selected in this paper can explore both opportunities and challenges (Cui, Ball and Coyne, 2002). While conducting research on similar kind of topic, Cheng, Jiang and Riley (2003) and Cui, Ball and Coyne (2002) found that UK based employers find it difficult to understand cultural orientation of employees from emerging markets like Brazil, China, India and others. Based on the above research findings, it can be surmised that UK based company is bound to face some cultural constraints while expanding business in countries like Nigeria, China and Brazil. Difference in cultural dimensions in UK as against cultures in China, Nigeria and Brazil can be depicted in pictorial manner. Figure 1: Culture: UK versus Brazil versus China (Source: Geert-Hofstede, 2014) Figure 2: Culture: UK versus China versus Nigeria (Source: Geert-Hofstede, 2014) First cultural dimension- Chen (2008) identified individualism as against collectivism as the first cultural dimension. People with individualistic cultural orientation care very less about collective interest of social groups and for most of them, objective of living is to satisfy personal interests. On contrary, people with collectivist orientation tend to work for collective interest of social groups and they are ready sacrifice personal interests for betterment of other social members (Kirsch, Chelliah and Parry, 2012). In collectivist society, people are tend to live within secure environment of family and peer groups while in case individualistic society, people prefer to achieve success by working alone. It is evident from the above diagram that UK is blended with individualistic culture while collectivist culture dominates in countries like Brazil, Nigeria and China. Second cultural dimension- Hofstede (1980 and 2000) and Chen (2008) identified masculinity as against femininity individualism as the second cultural dimension. In masculine society, success in life is being measured through criteria like dominance over others, sacrificing personal happiness in order to achieve career objectives or doing better than fellow colleagues. In case of feminine society, success in life is being measured through criteria like caring for others, fulfilling personal happiness and working towards betterment of others. According to the above diagram, UK, China and Nigeria have masculine culture in comparison to Brazil. Therefore, Brazilian employees are expected to be less competitive in comparison to employees of other three countries (Geert-Hofstede, 2014). Third cultural dimension- Hofstede (1980 and 2000) identified power distance between people in the country as important culture dimension. In countries with greater differences in power distribution, general people are being dominated by leaders and people who have access to powers. In case high distances in power distribution, people believe they are destined to be dominated by few powerful individuals and they no right to take part in social system of decision making. On contrary, in case of countries with low power distances, people are being equally treated and people play active role in social decision making process (Friedman, Dyke and Murphy, 2009). Based on above figure, it can be said that UK is a liberal country while people in countries like Nigeria, Brazil and China are being dominated by few individuals who have access to power centres. As a result, employees from Nigeria, Brazil and China will show adherence to company policies and rules in greater extent in comparison to UK based employees. Fourth cultural dimension- Hofstede (1980, 1991 and 1993) and Bozionelos and Wang (2006) identified uncertainty avoidance as important cultural dimension. In case of country with high level of uncertainty avoidance, people fear to take risks or avoid complex problems that disturb the balance of their lives (Brockner et al., 2000; Branine, 2005). From the above diagram, it can be said that Brazilian and Nigerian employees will resist changes or try to avoid new training programs due to fear of uncertainties. On the other hand, Chinese and British employees will show the tendency to welcome changes and easily accept changes in training program. According to Brewster and Mayrhofer (2008), human resource managers need to design cultural orientation specific training program for employees in order to avoid their resistance. In similar context, the company should also design specific training program in order to handle resistance from Brazilian and Nigerian employees. Fifth cultural dimension- short term as against long term orientation of people can be considered as fifth cultural dimension. Nigerian and Brazilian employees are being characterized by short term orientation. These employees look for immediate rewards for their actions irrespective of the magnitude and they are ready to forsake long term benefits of greater magnitude for availing immediate benefits. These employees can be satisfied with rise in salary or any other financial benefits. On contrary, Chinese and British employees are being characterized with long term orientations and they look for long term benefits. These employees can be satisfied with career development opportunity, promotion and assigning greater job responsibility to them. Practically Relevant Scenario Based on above discussion, opportunities and challenges in cross cultural management can be identified. Opportunities: while expanding business internationally, companies get access to diversified talent pool that has different skill set, personal values, talent, mental processing speed, coordination capabilities, knowledge exposures and many others. Accessing such diversified talent pool can help companies to integrate innovation or improve operational level performances (Schwartz, 2006). Through cross cultural management, organizations become able to establish equilibrium between reverse and trickle down innovations. By doing so, these companies can channelize the knowledge and information gathering across different strategic business units (Govindarajan and Ramanurti, 2011). Generally, in case of internationally expanding organizations, managers are globally shifted and these managers gather knowledge about cross cultural orientations. By doing so, these managers gain the competency to handle resistance or labour union problems that may face by the company while expanding business internationally (Rarick, Olin and Winter, 2007). Challenges being faced by companies while doing cross cultural management can be described in the following manner. Challenges: success of cross cultural management relies heavily on capability of managers to understand difference in cultural orientation and change their people management style in accordance to cultural orientation of particular country. Managers lacking such capabilities might face hostile environment in different countries and the company might face labour union problems (Schneider and Barsoux, 2003). In countries like India, China, Russia and others, English is being regarded as second language and most of the employees from these countries show general reluctance towards learning English as professional language, In such context, global managers from countries where English is used as first languages face difficulties to communicate ideas and business principles of the respective company to people from non-English speaking countries. In many cases, manager of companies having European or American origin communicate with employees from China, Brazil, Nigeria and others through video calling, telecalling, Skype communication, employee portal or online chatting. In each of this communication mode, importance of Face-to-face contact is being ignored and due to absence of physical communication, it becomes difficult for employees to trust their global managers. In cross cultural setting, managers face the dilemma regarding integration of virtual communication technologies in order to overcome geographical boundaries. As a result, it becomes challenging for multinational companies to build trust and engagement level of employees in different geographic nations while using virtual technologies. While working as HR head of the company mentioned in this study, objective of the author of this report will be to test whether mentioned opportunities and challenges have similarity in practical consequences or not. Interesting fact is that most of the identified theoretical opportunities and challenges regarding cross cultural management have similarity with practical consequence company mentioned in this study that is planning to expand its international operation in countries like China, Nigeria and Brazil. Practical opportunity: UK based managers would get the opportunity access rich cultural inheritance of China, Brazil and Nigeria. Through frequent interaction, global managers of the company will get opportunities to nurture scientific and managerial talents in those countries and encourage these talented individuals to contribute in betterment of operational performances of the company (Rarick, Olin and Winter, 2007). As part of integration of reverse innovation, global managers of the company can even use technological innovations in China, Nigeria and Brazil to achieve breakthrough innovation in home market (Govindarajan and Ramanurti, 2011). As part of challenges, English speaking managers of the company will face difficulties to communicate with Nigerian and Chinese employees who prefer to communicate in their local languages. Due to collectivist nature and risk avoidance mentality, Brazilian employees might show resistance towards virtual communication (Schwartz, 2006). However, as it is very difficult for the company to maintain face to communication with employees in Brazil, Nigeria and China due to geographical barriers. In such context, it will be difficult for the company to evoke trust among employees in those countries through integration of virtual communications like video calling, telecalling, Skype communication, employee portal or online chatting. Another challenge for managers of the company will be to manage diversified employee pool within the same office environment. For example, expatriate managers might face hostile resistance from local labour unions during the phase of establishment of strategic business units (SBUs) in Brazil, Nigeria and China. Conclusion and Recommendation It is evident from the above theoretical underpinnings and empirical examples that the company mentioned in this study will face both opportunities and challenges regarding cross cultural management while expanding business operation in countries like China, Nigeria and Brazil. Following recommendations can be used by the case organization for capitalizing existing opportunities and address pertinent challenges. The company should provide training and language coaching to its expatriate managers so that they will be able to overcome language barriers in countries like China and Nigeria. Global training and leadership program should be introduced by the company in order to nurture managerial talents in countries like China, Nigeria and Brazil. Top level managers and front line managers need to conduct face-to-face communication to employees in countries like Brazil, China and Nigeria. Annual global meeting should be organized by the company in order to invoke trust among employees in SBUs. The company should also develop a common global employee portal in order to gather feedback from employees in different geographic locations. On the other hand, cross country transfer of managers need to be conducted by the company for improving competency of these employees. Overall, it can be said that the company needs to be flexible when it comes to manage and improve performance of employees in countries like China, Brazil and Nigeria. Reference List Bozionelos, N. and Wang, L., 2006. The relationship of mentoring and network resources with career success in the Chinese organizational environment. International Journal of Human Resource Management, 17, pp. 1531-46. Branine, M., 2005. 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