Cross cultural management - Case Study Example

Cross cultural management Contents Cross cultural management 1 Contents 1 Introduction 2 Analysis 3 Section A 3 Section B 6 Question 2 6 Conclusion/Policy Recommendations 9 References 10 Introduction Cross cultural management is an important concept in modern business world. This study is centred towards analyzing various dimensions related to cross cultural management. Human beings belong to different cultures and one which is good in one culture might be different in another culture. Different cultures have different meanings and so it is misinterpreted by people. It can be stated as a major area of concern for multinational firms, since they comprise of wide base of employees belonging to diverse cultures. Cross cultural management is defined as an effective mechanism of varied cultural background’s individuals interacting or dealing with one another. Globalization is the underlying element which has initiated cross cultural management within an organizational system. Both divergence and convergence aspects hold significance in global economy and it should be managed efficiently. In a multinational company, there are wide array of business operations and this requires high levels of employee productivity. Employee support and motivation can be enhanced only when management is able to understand intricacies related to local cultural conditions. There are some major advantages a company encounters while operating in different countries such as exploring new market opportunities, gaining high profit margins, establishing image in wider geographical area, etc. On the other hand, problems are mainly in terms of team conflict, organizational changes, varied conditions in context of international and domestic market, etc. Analysis Section A SICLI is a well-known company in security segment that has its operations running from past 90 years. The company originally had its operations localized only in France but in later stage business operations were expanded into other geographical areas. All types of security related products like fire extinguishers, gas detection, fire detection, security training services, etc., are manufactured by the company. It provides services both to public and private sector corporations (Bhawuk and Brislin, 2000). SICLI has expanded its operations into global markets like USA, European, African markets, etc. French expats are utilized by the firm so as to enhance efficiency level of African operations. The firm encompasses large base of experienced employees and it is not possible for them to adapt to a completely new environment. Employees of SICLI feel that they are a part of an organization which ensures job security. This firm recruited individual from diverse cultural background but most integral part was played by French employees. However the company witnessed challenges when it was taken over by another group Williams Holdings Plc. The new CEO employed certain organizational changes which were not accepted by majority employees since its implications or importance was not conveyed appropriately (Paauwe, 2009). It is important that top management while expanding globally needs to be well aligned with core business culture and values. Multinational strategies or structures incorporated by MNCs are of various types like multi-domestic, global, international and transnational. SICLI have adopted the globalization strategy. In this form of strategy, companies are inclined towards increasing level of efficiency. A centralized approach is followed by a company that plans to be aligned with globalization strategy. SICLI’s new management is more concerned about transforming organizational culture into a productive one. Centralized control often does not give employees liberty to work independently in foreign subsidiaries (Price, 2007). This factor affected team work at SICLI because new rules and regulations were imposed upon employees. Cultural aspects are observed to change with country. It can be stated that the company while operating in foreign countries should analyze local conditions. These local factors tend to affect employment conditions. For instance, individuals belonging to a specific region might desire for performance based incentives whereas some other culture might give more importance to basic salary rather than incentives. Globalization has a common objective which is to improve upon productivity level and build a strong corporate image in new markets. This can be accomplished when CEO works in collaboration with local suppliers, experienced HR professionals of that area and even gain information from team members who are aware about new cultural trends (Barry, 2002). Leadership styles would also change from one region to another. In some countries democratic leadership style will be most suitable while in other culture, laissez faire might be found as appropriate. CEO should take into consideration this aspect during expanding operations globally. With change in leadership approach across varied cultures employees will find it more comfortable to work in such organizational environment. Local responsiveness also needs to be included when a company opts for expanding globally. On the other hand, global companies like SICLI also need to be concerned about employment techniques. Cross-cultural diversity should form a major strength for an organization. This is simply because wide base of knowledge can be easily accessed (Fortier, 2008). Acquiring and retaining a pool of talent is the main task of SICLI’s new management. Apart from organizational restructuring in terms of quality improvement, team restructuring, product diversification, imposing deadlines, etc., CEO also needs to improve upon employment mechanism. Amongst various approaches regiocentric approach is a suitable one during hiring employees from different cultures or countries. This is a commonly used geographical structure where focus is on enhancing resource strength of each foreign subsidiary. On basis of this policy, key positions are offered to those individuals who possess expertise. Cultural factors should not dominate any type of employment conditions. To a certain extent some rules need to be standardized for all subsidiaries but employment rules must be on basis of local norms or conditions. Team members can be transferred within a particular geographical area and not completely to a new domain. This would enable the team members to adapt easily to local cultural aspects. SICLI is currently aiming at bringing forth changes within organizational environment in order to improve employee productivity. CEO needs to adopt participative leadership style so as to communicate change objectives directly to employees. Team members should possess a clear understanding regarding goal of change management process and its long term or short term objectives. The HRM cycle needs to be followed by the company so as to ensure that talented employees are being recruited and retained within the organization. Policy while recruitment should encompass certain norms like employees at initial 6 months will be placed in home country of SICLI’s operations and later transferred into other foreign subsidiaries. External recruitment process needs to be implemented along with proper reward and performance appraisal systems (Russon, 2003). A separate team will be structured for handling employee grievances and this shall enhance team work. It can be supported through designing effective training and development programs. Cross cultural management comprises of two cultural issues – lack of understanding of other cultural aspects and dominance of one culture over another. It can be mitigated through including appropriate leadership approaches and team building exercises in the policy framework. Centralized approach is the central component of globalization strategy but in case of SICLI local responsiveness should be encompassed to avoid any form of team conflict or discrepancies. Section B Question 2 SICLI operates in an intensely competitive business environment. The private security sector has a great scope for further growth and development. Every private and public sector firms are cautious about security systems. This facilitates security companies like SICLI to acquire maximum percentage of market share. SICLI’s operations are highly sophisticated and it requires effective team work (Armstrong, 2006). Cross-cultural activities often need to witness challenges in the form of aligning employees with common business objectives. Employees have different mindset since they belong to different cultures. This in turn creates problems within workplace. However as per SICLI’s case, multicultural teams have to be developed to address global business objectives. These multi-cultural teams would include employees from different foreign subsidiaries. It is indeed a difficult task to understand cultural dimensions of each employee and then develop employment strategies (Putnam, 2007). Multi-cultural teams will be structured on basis of expertise possessed by employees. For instance individuals having similar competency would be grouped together. This shall help to eradicate team conflict to a certain extent as all team members will be at same level. Reward systems can be regarded as the basis of these multi-cultural teams. Management needs to highlight that group performance would be given more importance in comparison to individual performance. On the other hand, decisions have to be taken through a collaborative decision making process. In this process all team members would be encouraged to contribute their ideas for company’s success. While structuring multi-cultural teams CEO must give importance to all cultures. This would help to eliminate any form of linguistic barriers which is prominent in multi-cultural workplace environment. Employees need to gain proficiency in different languages to be a part of multi-cultural teams. Multi-linguistic approach is an essential component when it comes to working together as a team (Erickson, Stephenson, Bradley and Williams, 2009). On the contrary, this aspect can even lead to communication problems. Communication process is all about adopting proper media channels so to communicate message of sender to receiver. Often language barriers are a common issue in multi-cultural environment. This can be eliminated through utilizing a common language which is understandable to all. For this approach, management needs to conduct a survey to identify a particular language that can be used by employees (Brewster, 2008). This language will then be standardized for all multi-cultural teams to avoid dominance of one culture over another. Managing multi-cultural teams is a major challenge for the management. Reward systems shall be restructured for effectively managing multi-cultural teams. These rewards would be conveyed both in financial and non-financial terms. Non-financial aspect will comprise of promotions or appraisals given to employees. Employee motivation rests upon acknowledgement they receive upon performing well (Weber, 2006). Leadership can also be stated as an important dimension in cross cultural management. Participative leadership style would be most appropriate in order to manage cross-cultural teams. This style enables leaders to directly communicate with employees to understand their problems and resolve it successfully. SICLI over the years have exhibited a traditional approach within its system. Employees have been accustomed to business process and it eventually will be a difficult task to adapt to new cultural environment. This kind of mindset can be changed by giving them an opportunity to grow through implementing their own decisions. Flexibility is a critical factor in multi-cultural teams (Torrington, Hall and Taylor, 2014). Team members should be given flexibility in terms of framing collective decisions and resolving any type of conflict occurring within the team. At times it would not be possible to bring along all team members under the same roof. In order to avoid such scenario advanced technology will be utilized in every office of SICLI. On basis of this technology team members can communicate with one another easily inspite of being located in different geographical areas. Team meeting will be hosted on every weekend so as to analyze performance level of multi-cultural teams. Their suggestions for further improvement would also be undertaken by the management of SICLI. The company is a French based organization and has its operations expanded across Germany, USA and African markets. In these global markets, major issue will be in communication problem. Different region possesses different culture and language. Multi-cultural operations tend to make communication a major problem since employees speak in varied languages (Mello, 2011). This eventually results into misunderstandings amongst team members. Working atmosphere tends to change across geographical markets. For instance, in Germany market organizational culture is more task-oriented whereas in African market it is relationship oriented. SICLI is not able to maintain uniform culture in the organizational system due to widespread business operations. Interpersonal conflict can be witnessed while operating across different regions. Employees can be dominative because company would be operating in a completely new market segment. SICLI would take sufficient time to interpret local cultural conditions and this might be advantageous for other players. Domestic market conditions are highly distinguishable from international market conditions. This variance tends to disrupt business operations and initiates framing of new business strategies. Brand internalization then becomes a vital aspect because employees lack brand understanding and are not able to communicate brand message to customers (Kazmi and Ahmad, 2001). Core brand values are often not conveyed properly when an organization plans to diversify into different geographical markets. Culture of varied markets affects team work or overall team productivity. Workplace diversity is a common phenomenon observed within such global companies. SICLI is bound to witness issues in context of aligning team members with common business goals and objectives. Conclusion/Policy Recommendations As per the case analysis, SICLI is opting for exploring new market opportunities by expanding globally. It is a France based organization and delivers quality products to consumer market. The company was taken over by Williams Holdings Plc., and this resulted into team conflicts. Employees were certainly not convinced with new business environment and this affected their level of motivation. Organizational conflict was witnessed in this firm because team restructuring led to misunderstandings. Foreign people were recruited at managerial level which was not accepted by team members. Global coordination was a major problem observed in SICLI. These issues could have been eliminated through implementing an open innovation environment where expertise or skills are given more importance in comparison to culture. Performance based analysis can prove to be a major strength of the company as it motivates employees to set high performance standards. SICLI can even aim at creating local responsiveness throughout the system. This would initiate local cultural understanding amongst team members. A proper knowledge about local culture helps to adopt best workplace practices. On the other hand, CEO of the company can incorporate a platform through which employees belonging to different foreign subsidiaries can easily communicate with one another. Participative approach will motivate employees to perform well rather than being indulged into cultural conflicts. References Armstrong, M., 2006. Strategic human resource management: a guide to action. London: Kogan Page. Barry, B., 2002. Culture and equality: an egalitarian critique of multiculturalism. Cambridge: Harvard University Press. Bhawuk, D. P. S. and Brislin, R. W., 2000. Cross-cultural training: A review. Applied Psychology: an International Review, 49 (1), pp.44-45. Brewster, C., 2008. Contemporary issues in HRM: Gaining a competitive advantage. Oxford: Oxford University Press. Erickson, M., Stephenson, C., Bradley, J. and Williams, S., 2009. Business in society: people, work and organizations. Cambridge: Polity. Fortier, A. M., 2008. Multicultural horizons: diversity and the limits of the civil nation. New York: Taylor & Francis. Kazmi, A. and Ahmad, F., 2001. Differing approaches to strategic human resource management. Journal of Management Research, 1 (3), pp.133-140. Mello, J. A., 2011. Strategic human resource management. Cincinnati: South Western. Paauwe, J., 2009. HRM and Performance Achievements, Methodological Issues and Prospects. Journal of Management Studies, 46(1), pp 129–142. Price, A., 2007. HRM in a business context. London: Thomson Learning. Putnam, R. D., 2007. Diversity and community in the twenty-first century. Scandinavian Political Studies, 30 (2), p.60. Russon, J., 2003. Human experience. Albany: State University of New York Press. Torrington, D., Hall, L. and Taylor, S., 2014. Human resource management, 9th Ed. London: Pearson Education. Weber, S., 2006. Intercultural training as identity negotiation. Frankfurt: Peter Lang. Read More