Effective Cross-Cultural Management in the UK Company - Essay Example

Effective cross-cultural management Cross-cultural management is one of the most crucial aspects that are considered by organizations while formulating international expansion strategies. This is precisely because implementing an effective cross-cultural management stagey is a key factor ensuring an organization’s success. That is why in this paper, the researcher has assumed the position of an HR head working for a UK company who is supposed to do an in-depth analysis of foreign country cultures as well as associated challenges and opportunities and convey the same to the management as they are setting up to expand internationally. The researcher has been able to identify several opportunities and challenges by reviewing researches done by empirical scholars in the field of cultural management. Majority of ideas set forth in the empirical researches are quite consistent with the practical implications. Having done a thorough analysis, the researcher was able to present suitable recommendations for the UK based company, which will in turn ensure long-term sustainability in the global arena. Table of Contents Introduction 4 Theoretical exploration 5 Several cross-cultural aspects 5 Cultural dimensions 6 Individualism and collectivism 6 Uncertainly avoidance 6 Masculinity and femininity 6 Power Distance 7 Long-term and short-term orientation 7 Challenges 7 Complexity in managing culturally diverse workforce 7 Establishing a robust communication framework 8 Opportunities 8 Access to diversified workforce 8 Free flow of knowledge 9 Practical situation 9 Conclusion and Recommendation 10 Reference List 11 Introduction According to Hennart and Zeng (2002), amalgamation of organizational structure, team dynamics and business infrastructure has gone through a regime shift, which has been witnessed over last 20 years primarily because of a globalized world. Due to a strongly interconnected world, frequency as well as amount of knowledge and information transmission across borders has increased to a great extent (Hofstede and McCrae, 2004). Considering the current intensity of competition and business environment, it is noticed that companies headquartered in a particular country are seeking entry into international field by means of business expansion on a global magnitude. Johnson, Lenartowicz and Apud (2006) suggested that the underlying motive behind implementation of such a strategy is to gain an advantageous position. In effect, companies gain access to a larger base of customer and are able to amplify growth rate (Minbaeva and Michailova, 2004). Empirical research scholars such as, Moran, Harris and Moran (2007) and Morley and Robins (2001), provide a different view point. According to the authors, companies implement global expansion strategies in order to spread risk evenly. Such strategies offer companies with the opportunity to diversify their business portfolio, thereby setting up compound earning sources and learning foreign cultures. The fundamental motive behind undergoing such a learning process is to support innovation and ensure long-term organizational sustainability (Cullen, 2002; Kawar, 2012; Kottak, 2011). The facts that have been mentioned above necessitate implementation of an effective international expansion strategy. The responsibility of the same has been assigned to the researcher who is working as an HR head for an organization headquartered in UK as the management is considering several strategies to seek entry into emerging markets such as, Brazil, China and Nigeria. Given the fact that the company is based in UK, it is likely that the management will face severe challenges while attempting to gain entry into countries that are culturally different. Despite this fact, the company may also obtain opportunities from such an international expansion. This is precisely the reason why the management has intended to appoint general workforce from the host country and managers from the home country. The manager will primarily be assigned with the responsibility to manage internal operations. With such a diverse workforce, a cultural conflict between the expatriates and local workforce is quite likely to happen (Littrell and Salas, 2005). Hence, the researcher has been assigned with the responsibility to assure that such crisis does not escalate. In order to be able to do so, the HR head will conduct a thorough analysis of host countries’ cultures and foreground available opportunities as well as challenges to the management. Theoretical exploration Several cross-cultural aspects Hall (1955; 1966) was the first author to highlight the relevance of cross-cultural management by referring to several anthropological ideas. In spite of the progress made by the author, the theories were discreet. Eventually the theory was developed conclusively by Hofstede (1980), who provided readers with a detailed perspective about cross-cultural administration. Trompenaars (1993) and Hofstede (1991) highlighted several cultural dimensions that distinguished one country from the other. The only difference between their proposals was the number of dimensions highlighted. Hofstede in his work proposed five cultural dimensions; whereas Trompenaars proposed seven, out of which five were common with that of Hofstede. The common cultural aspects that have been identified in majority of empirical literatures are uncertainty avoidance, individualism versus collectivism, power distance, long-term versus short-term orientation and masculinity versus femininity (Hofstede, 2000). During the tenure of working as an HR head of the company, the researcher was able to identify that the company has very limited or no experiences, as far as cross-border expansions are concerned. Alongside, another major barrier lying in face of the company is the fact that majority of the managers belong from US, Europe and UK who possess knowledge regarding intricacies of cross-border expansion into a country with greatly dissimilar culture (Lee, Madanoglu and Ko, 2013; Ahmed and Pang, 2009; Bennett, Aston and Colquhoun, 2000). Thus, for a company with no prior experience, expansion into countries like, Nigeria, Brazil and China, may pose many challenges and on the flip side, may offer them with growth opportunities. For example, the researches done by Chen, Tsui and Farh (2002) revealed that European organizations find it relatively difficult to understand the collectivism aspect of employees belonging from China. Hence, a comparative analysis between cultural dimensions of the home and host countries is pivotal, that will serve as a solid groundwork, helping the HR head to realize resemblance and disparities present in cultures of these countries. Cultural dimensions Individualism and collectivism Taking into consideration the individualistic culture, Kirsch, Chelliah and Parry (2012) argued that people are more concerned about safeguarding their personal interest instead of considering surrounding members as a whole. On the other hand, people following the collectivist culture are more concerned regarding their families and emphasize equally on safeguarding interest of surrounding members. The above arguments place UK in the category of countries that follow individualistic culture. The same facts place China, Brazil and Nigeria in the category of countries following a collectivism culture. Collectivist people reside in a secure environment comprising of robustly united groups and anticipate social safety for loyalty shown towards the country. Uncertainly avoidance Uncertainty avoidance typically refers to a culture where people more often than not tend to evade uncomfortable circumstances or formless problems. People belonging to this culture usually refuse to accept new products in the market. They choose to make a well-informed judgment regarding a particular product by learning from experience of prior users of the product. According to Geert-Hofstede (2014), Brazil can be identified as a country that follows an uncertainty avoidance culture. Masculinity and femininity A society dominated by strong and completive male characteristic can be termed as a masculine society. People belonging to such a society strive for recognitions and success keeping quality of their life at stake. UK can be cited as the most prominent example of a country that has a masculine society. In a feminine society, people pay more attention to their personal values, quality of life as well as empathise towards others, instead of worrying about recognition and success (Geert-Hofstede, 2014). The above arguments provide a justification for considering Brazil as a feminine culture oriented country and on the other hand, China and Nigeria as masculine societies. Power Distance The term power distance describes the extent to which authority of making decisions is shared among people. Countries with a greater distance house common people who are majorly controlled by individuals with authority to make decisions. Taking the above facts into consideration, it can be said that UK is a democratic country, where employees holding the lowest of ranks are also encouraged to participate within the decision making framework of the organization. So, the country has a low power distance. In contrast, China, Brazil and Nigeria have a greater power distance where employees holding low ranks are considered invalid, as far as the organizational decision making framework is concerned. Long-term and short-term orientation China and Nigeria are two countries who have a long-term orientation because people here more often than not wait to realize the results for their efforts and simultaneously emphasize on forming relationship with stakeholders of the company so as to attain long-term benefits. Brazil and UK have short-term orientation as people rarely wait to realize outcomes in return for the effort made by them. They expect that their demands and needs will be satisfied almost instantaneously (Geert-Hofstede, 2014). Challenges Serious complications and challenges lie ahead for a company that is on the brink of making an international expansion in a country with a relatively different culture. The challenges are: Complexity in managing people with diverse cultural background. Implementing a suitable communication approach that will facilitate thorough information sharing (Schwartz, 2006; Oertig and Buergi, 2006). Complexity in managing culturally diverse workforce Empirical literatures as well as practical situations have suggested the fact that managers face considerable difficulties while managing people belonging from different backgrounds. They fail to understand expectations of a culturally diverse workforce (Schaffer and Riordan, 2003; Triandis, 2001; Wood and Eagly, 2002). As a result of that, managers frequently tend to do the mistake of applying a generalized technique for handling their workforce in which case it becomes inadequate. Application of such a technique often puts managers in uncomfortable situations, where they face negative behaviour from subordinate employees (Gelfand, Erez and Aycan, 2007; Hånberg and Österdahl, 2009; Harrison and Huntington, 2000). In addition, trust relationship between the manager and employees is weakened. The above issues suggest that managers will face a huge challenge while managing a culturally diverse workforce. Thus, managers are required to modify their leadership techniques in order to adapt to conditions that may exist because of a culturally assorted workforce (Dalton et al, 2002). Establishing a robust communication framework The management has to make sure that irrespective of the local languages spoken in their partner countries, English is the primary language to be used while communicating with individual members and groups as a whole. This is particularly because managers often find it considerably difficult to manage people in countries where English is given a second preference or is the second language (Govindarajan and Ramanurti, 2011). For example, in countries like, Qatar, China and Japan, people tend to be biased about their local languages and that is why it becomes relatively troublesome for managers to facilitate free flow of information between every individual member (Walumbwa, Lawler and Avolio, 2007). Opportunities According to Molinsky (2007) and Rarick (2007), organizations acquire two primary opportunities while explaining into a foreign country: Firstly, organizations gain access to a diversified workforce that has individuals with unique sets of skills and experience. These factors can be unified together in order to form an efficient team. Secondly, management of an organization can also get a holistic view of the culture that exists in foreign countries, which will support formulation and implementation of effective strategies. Access to diversified workforce Companies considering an internal expansion strategy will always be in need of a workforce that belongs from the home country. This is because host country workforce will have an enhanced understanding of the culture that prevails in their country as well as a strong grasp over the local language (Dong and Liu, 2010; Bonvillain, 2003; Chevrier, 2003). So, with their help, the foreign company will be able to negotiate with external as well as internal factors that may escalate in the host country. In addition, the host county employees might have certain skills that may be inadequately present in the expatriates. These skills are often a key determinant of a company’s success and hence, act as an opportunity for the management (Schneider and Barsoux, 2003). Free flow of knowledge As far as the strategic stand point is concerned, it is very crucial for organisations to get a wholesome view of all factors, both positive and negative, associated with the host country. Possessing such an enhanced knowledge and sharing it with organizational members will enable the management to implement effective strategies and secure long-term sustainability of the organization in the international playing field (Cheng, Jiang and Riley, 2003). Practical situation By doing an in-depth analysis, the HR (in this case; the researcher) was able to infer that opportunities and challenges stated above are quite closely associated with situation that the company might face while implementing expansion strategies. A thorough analysis of the cultural dimensions and putting the same in perspective of the company has revealed that the organizational management will face significant obstacles while expanding to China as English is not a common language in that country. It will be a two-fold challenge, where on one side, managers will find it considerably difficult to understand Chinese language; and on other hand, native employees will encounter problems in understanding organizational objectives and expectations in English. In addition, even if majority of the employees are able to communicate in English, it will still be relatively hard for expatriates to interpret their thoughts because native employees will have a Chinese accent while speaking English. Owing to these issues, it will be comparatively tough for the management to ensure a free flow of information. Nevertheless, in case of Nigeria and Brazil where English is quite commonly spoken, it will be easier for the UK based company to expand into such countries. As far as establishing a robust communication framework is concerned, that might again prove to be a big issue for the company. This is precisely because with advent of modern technology, communications occur over internet with the help of virtual networking platform such as, Skype and video conferencing. Even so, in China, Brazil and Nigeria, people prefer to communicate in person as they believe that face-to-face communication results in effective information sharing (Dalton, et al., 2002; Cheng, et al., 2004). This might pose to be big challenge for the UK based company as setting up meetings in the host country can be expensive. As far as opportunities are concerned, the company will get access to a diversified workforce, which will enable the management to gain an in-depth insight of the situation prevailing in the host country. This knowledge will allow them to formulate their strategies in accordance with internal and external factors associated with the host country. Moreover, the workforce that they obtain might have certain skills, which can be absent in the expatriates. Therefore, by recruiting a workforce, the company will be able to fill the prevailing skill gap (Christopher, 2002; Ely and Thomas, 200; Forster, 2000). Conclusion and Recommendation Having done an in-depth analysis, it is realized that operating in a culturally dissimilar zone and exploring cross-cultural management opportunities offer even proportion of opportunities and challenges to an organization. So, UK based companies should make sure to tap every possible opportunity that arises and should simultaneously lay equal emphasis on framing strategies in order to mitigate any challenges that may escalate. As a recommendation, it can be suggested that the company, while going through the initial phase, should appoint managers from the home country with responsibility of supervising the expansion process. The company should subsequently look forward to recruit skilled and experienced people from the host country and train them properly so as to make them eligible for working as managers. Considering the fact that all host countries prefer face-to-face communication over virtual communication, managers who are appointed to work in the UK headquarters should schedule frequent face-to-face meetings in the host countries so as to remove any barrier within the process of communication. In that way, the organization will be able to achieve a two-fold objective. On one hand, they will be able to respect the host country culture and on the other hand, they will be able to establish a relationship based on trust and respect. Reference List Ahmed, A. and Pang, Z., 2009. Corporate culture in an international joint venture. [pdf] Diva-portal. Available at: [Accessed 13 May 2014]. Bennett, R., Aston, A. and Colquhoun, T., 2000. Cross‐cultural training: A critical step in ensuring the success of international assignments. Human Resource Management, 39(2‐3), pp. 239-250. Bonvillain, N., 2003. Language, culture and communication. New Jersey: Prentice Hall. Chen, Z. X., Tsui, A. S. and Farh, J. L., 2002. Loyalty to supervisor vs. organizational commitment: Relationships to employee performance in China. Journal of Occupational and Organizational Psychology, 75, pp. 339-356. Cheng, B. S., Chou, L. F., Huang, M. P., Wu, T. Y. and Farh, J. L., 2004. Paternalistic leadership and subordinate reverence: Establishing a leadership model in Chinese organizations. Asian Journal of Social Psychology, 7, pp. 89-117. Cheng, B. S., Jiang, D. Y. and Riley, H. J., 2003. Organizational commitment, supervisory commitment, and employee outcomes in Chinese context: Proximal hypothesis or global hypothesis? Journal of Organizational Behavior, 2, pp. 313-334. Chevrier, S., 2003. Cross-cultural management in multinational project groups. Journal of World Business, 38(2), 141-149. Christopher, D., 2002. British culture: an introduction. United Kingdom: Routledge. Cullen, J. B., 2002. Multinational management: A strategic approach. 2nd ed. Cincinnati, OH: South-WesternCollege Publishing. Dalton, M., Ernst, C., Leslie, J. and Deal, J., 2002. Effective global management: Established constructs and novel contexts. European Journal of Work and Organizational Psychology, 11(4), pp. 443-468. Dong, K. and Liu, Y., 2010. Cross-cultural management in China. Cross Cultural Management: An International Journal, 17(3), pp. 223-243. Ely, R. J. and Thomas, D. A., 2001. Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes. Administrative Science Quarterly, 46(2), pp. 229-273. Forster, N., 2000. Expatriates and the impact of cross‐cultural training. Human Resource Management Journal, 10(3), pp. 63-78. Geert-Hofstede, 2014. Country comparison. [online] Available at: [Accessed 13 May 2014]. Gelfand, M. J., Erez, M. and Aycan, Z., 2007. Cross-cultural organizational behavior. Annu. Rev. Psychol., 58, pp. 479-514. Govindarajan, V. and Ramanurti, R., 2011. Reverse innovation, emerging markets, and global strategy. Global Strategy Journal, 1, pp. 191–205. Hall, E. T., 1955. The anthropology of manners. San Francisco: W.H. Freeman. Hall, E. T., 1966, The hidden dimension. New York: Doubleday. Hånberg, C. and Österdahl, G., 2009. Cross-cultural training of expatriates. [online] Available at: < http://www.diva-portal.org/smash/get/diva2:227437/FULLTEXT02> [Accessed 13 May 2014] Harrison, L. E. and Huntington, S. P., 2000. Culture matters: How values shape human progress. New York: Basic Books. Hennart, J. F. and Zeng, M., 2002. Cross-cultural differences and joint venture longevity. Journal of International Business Studies, pp. 699-716. Hofstede, G. and McCrae, R. R. 2004. Personality and culture revisited: Linking traits and dimensions of culture. Cross-cultural research, 38(1), pp. 52-88. Hofstede, G., 1980. Culture’s consequences: International differences in work related values. Beverly Hills, CA: Sage. Hofstede, G., 1991. Cultures and organizations: Software of the mind. Maidenhead: McGraw-Hill. Hofstede, G., 2000. Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. 2nd ed. Thousand Oaks, CA: Sage. Johnson, J. P., Lenartowicz, T. and Apud, S., 2006. Cross-cultural competence in international business: Toward a definition and a model. Journal of International Business Studies, 37(4), pp. 525-543. Kawar, T.A., 2012. Cross-cultural Differences in Management. International Journal of Business and Social Science, 3(6), pp. 1-7. Kirsch, C., Chelliah, J. and Parry, W., 2012. The impact of cross-cultural dynamics on change management. Cross Cultural Management, 19(2), pp. 166-195. Kottak, C. P., 2011. Cultural anthropology: Appreciating cultural diversity. New York: McGraw-Hill. Lee, K., Madanoglu, M. and Ko, F. Y., 2013. Developing a competitive international service strategy: a case of international joint venture in the global service industry. Journal of Services Marketing, 27(3), pp. 245-255. Littrell, L. N. and Salas, E., 2005. A review of cross-cultural training: Best practices, guidelines, and research needs. Human Resource Development Review, 4(3), pp. 305-334. Minbaeva, D. B. and Michailova, S., 2004. Knowledge transfer and expatriation in multinational corporations: the role of disseminative capacity. Employee Relations, 26(6), pp. 663-679. Moran, R. T., Harris, P. R. and Moran, S., 2007. Managing cultural differences. United Kingdom: Routledge. Morley, D. G. and Robins, K., 2001. British cultural studies: geography, nationality, and identity. United Kingdom: Oxford University Press. Oertig, M. and Buergi, T., 2006. The challenges of managing cross-cultural virtual project teams. Team Performance Management, 12(1/2), pp. 23-30. Schaffer, B. S. and Riordan, C. M., 2003. A review of cross-cultural methodologies for organizational research: A best-practices approach. Organizational Research Methods, 6(2), pp. 169-215. Schneider, S. and Barsoux, J. L., 2003. Managing Across Cultures. Essex: Pearson Education. Schwartz, S. H., 2006. A theory of cultural value orientations: Explication and applications. Comparative Sociology, 5(2/3), pp. 137-182. Triandis, H. C., 2001. The study of cross cultural management and organization: The future. International Journal of Cross Cultural Management, 1(1), pp. 17-20. Trompenaars, F., 1993. Riding the waves of culture: Understanding cultural diversity in business. London: Economist Books. Walumbwa, F., Lawler, J. and Avolio, B., 2007. Leadership, individual differences, and work related attitudes: A cross-cultural investigation. Applied Psychology, 56(2), pp. 212-230. Wood, W. and Eagly, A. H., 2002. A cross-cultural analysis of the behavior of women and men: implications for the origins of sex differences. Psychological bulletin, 128(5), pp. 500-699. Read More