Cross Cultural Management - Literature review Example

Cross Cultural Management Cross-cultural management is a relatively new concept in the business environment. The term developed from the rapid globalisation phenomenon which has brought a plethora of changes in the business arena. Consequentially, it has resulted in the integration of the world economies, efficiency in trade and financial integration and cooperation. Companies are now able to establish their companies in many countries around the world. This opportunity enables corporations to enjoy numerous benefits attributed to multi-corporations. Small companies that choose to remain local lose too many competitive advantages (Velo 2011:3). Corporations are currently enjoying the benefits of globalisation. Companies now have a large consumer base and a wide supply of labour. However, globalisation has resulted in a series of new challenges. Cultural conflict is one of the major challenges facing managers today. The issue of culture is a relatively modern problem arising from the rapid globalisation of societies. Therefore, managers are required to adopt effective cross cultural management style so as to reduce cultural conflicts and enhance business success. Cross cultural management is detrimental to the success of a business. As a management style, this new method enables managers to develop innovative means of handling intercultural communication. Moreover, cross cultural management enables companies to enhance their capacity to establish, develop and maintain their businesses in the constantly changing business environment (Velo 2011:3). Companies that effectively utilise cross cultural management enhance their position to profit in the business field. The complexity and challenges resulting from globalisation, managers need to comprehend how to work with other people and organisations around the world. Cultural competence is detrimental to the success of the business in the globalised world. There are various definitions of culture. Sigmund Feud defined culture as “The construction that hides the pulsional and libido-oriented reality governing a society (Velo 2011:3).” Herder defined culture as a way of being that members of a nation identify with. Kardurer contributed to the description by stating that “Culture is the psycho-characteristic configuration of the basis of personality (Velo 2013:3).” Hofstede’s definition of culture states that “Culture involves the mental programming of the human spirit that prohibits distinguishing of members of one category in comparison with members of another category” (Velo 2013:4). In simple terms, culture refers to the shared beliefs, values and attitudes governing the lives of a particular society. Culture is a concept that plays an important part our daily lives. Culture influences how individuals perceive themselves and others in the society. Moreover, culture determines what is acceptable or unacceptable in a society. As a concept, culture is a socialisation process that encompasses a range of ideologies (Livesey & Lawson 2006:2). Culture entails a range of ideas pertaining to a range of roles, values, norms and institutional structures. People of a particular society develop mechanisms for the transmission of cultural ideas from one generation to the next. There are forces that perpetuate cultural differences. These forces include: political changes, historical events, environmental change, biology and ecology. Communities purpose to adhere faithfully to their culture that has been passed down from one generation to another. Moreover, subcultures also exist in some cultures. Subcultures are smaller groups of individuals sharing a particular way of life. One particular example of subculture in a society is students, or football supporters (Livesey & Lawson 2006:3).Due to the rapid nature of globalisation and the keen adherence to individual cultures, cultural contradictions and complexities exist in the society. Researchers have come up with a series of models in an attempt to explain the cultural differences in the society. In 1976, Hall developed a taxonomy consisting of high and low context cultures (Junho 2011:5). According to Hall, high context cultures are relational, intuitive and collectivists in nature (Wilson 2015:605). According to Hall, individuals of high context cultures emphasise interrelationships. Societies in the Middle East, Asia and Africa are examples of low context cultures (Wilson 2015:605). Low context cultures are individualistic, linear, and logical and action oriented in nature. Societies in North America and Western Europe are examples of societies with low context cultures (Wilson 2015:605). Hall’s concept identifies that communication styles vary differently around the world. Limitation to this theory is that it is largely derivative and can best be used to identify the distinction between rule-based and culture-relationship based cultures (Hooker 2008:1). Hofstede identified five main dimensions of culture (Velo 2013:25). The first dimension is PDI (Power Distance Index).This dimension focuses on the degree of equality or inequality between the individual’s in a country. For example, a lower a low PDI symbolises minor emphasis on the differences between citizen power and wealth. Therefore, there is equal opportunity in the society. However, a high PDI would mean that hierarchy is a requirement for social order (Velo 2013:25). The second dimension is Individualism (IDM).This dimension focuses on the degree a society reinforces individual or collective achievement and interpersonal relationship. For example, a high ranking indicates that individual rights are significant in the society. Masculinity is the third phenomenon. Masculinity-Femininity refers to the traditional concept in which men are regarded as main providers and sources of power in the society. The last dimension identified by Hofstede is the Uncertainty voidance Index. This index analyses the level of tolerance for ambiguity or uncertainty in a given society. Lastly, the Long Term Orientation dimension focuses on the extent to which a society exhibits a pragmatic future rather than a short term point of view (Velo 2013:26).The research carried out by Hofstede is significant and provides a basis of knowledge for many researchers in the field. This phenomenon is ideal because it allows direct comparison between cultures. Moreover, Hofstede distinctly presents the role of culture on the varying attitudes and values identified across cultures. The five dimension phenomenon empirically quantifies cultural dimensions (Junho 2011:9). There are a number of protagonists and antagonists to Hofstede’s theory. Critics to this theory state that the five dimensions described by Hofstede are too few and therefore, these dimensions do not give sufficient information concerning cultural differences. Some researches question the data utilised in the development of this theory. Critics state that the timing of the survey interferes with the accuracy of the collected information. There were political instabilities during the time the survey was carried out. Other critics state that the theory is dependent on a survey conducted by one company and therefore, the theory cannot be used to analyse other companies (Piepenburg 2011:33). Some critics also deem Hofstede’s theory as out of date and thereby unable to deal with the current structure of culture (Jones 2007:24). Regardless, Hofstede’s theory as the most widely used in the identification of cultural differences (Velo 2011:26). Hofstede’s phenomena establish a framework for cultural analysis. For example, Individualism as a phenomenon describes the individual’s tendency to identify themselves as individuals. This phenomenon incorporates factors such as personal achievements, individual rights and independence. In collectivist cultures, people identify themselves as part of a group. People from a collectivist society are more concerned with the welfare of a group than the individual. Global managers who can identify this difference can effectively adapt by changing their management and communication styles to suit the different cultural environment. Culture can disrupt the communication and negotiation process. Moreover, culture poses a major challenge to the leadership of an organisation. Individuals in a country share similar language, customs and traditions. Culture in turn affects the perception of current events and influences attitudes and behaviours. Understanding the differences in cultures enhances communication and negotiation process. Communication involves verbal and nonverbal forms. Whereas it is simple to identify differences in culture, non-verbal differences in communication are difficult to understand and can disrupt the communication process. Communication between people of diverse cultures can result in misunderstanding. Different communities have different cultural backgrounds in terms of communication. Also, in a globalised business, the manager needs to communicate with employees from diverse cultures. This creates the need to develop intercultural communication and negotiation skills. Communication conflicts can result from cultural difference. For example, a plant manager from America is sent to Brazil in order to investigate the slow production of the business. The manager is eager to get to Brazil, deal with the issues in the plant and return to America. Upon arrival to the industry, the manger calls for a meeting with the local supervisors and the local plant manager. The Brazilian employees welcome the American manager. And begin to enquire about the wellbeing of his family. This non formal behaviour offends the plant manager as he is eager to get down to business and go back to America. As a result of the plant manager’s democratic style of leadership, the meeting is unresponsive and he is unable to obtain sufficient feedback concerning the business (Sadri & Flammia 2011:127). In this case, the manager is from an individualistic society. He fails to identify the collective nature of the Brazilians and as a result of his assumptions, he is unable to effectively communicate with the employees. Culture interferes with the negotiation process. Culture determines what is acceptable or unacceptable in the society. As a result, culture is a major determinant of the socialization process. How an individual perceives themselves also affects their normative behaviour. Moreover, culture defines the rules governing a society. Therefore, a global manager in an unfamiliar environment may experience a cultural barrier in terms of interaction with the members of this new society. Negotiation takes place between individuals with conflicting interests (DeMesquita 2004:155). Negotiation as a process aims at solving conflicts within an organisation and its environment. Managers are expected to become culturally sensitive to the different negotiation styles in different cultures. Cultural sensitivity positively impacts on the negotiation process. Leadership varies across cultures. There are varying management styles resulting from the different types of leadership across national and regional borders. The American style of management is characterised by professionalism and friendliness. American employees are motivated when they feel independent and in control of their own destinies. Contrary to the American style of management, the Japanese managers motivate through counsel and persuasion (Aswathappa 2010:218). Japanese managers lead through harmony and consensus. Arab speaking countries also have a different management style. Aswathappa states that Arabic managers send to adopt the parenting-type role that focuses on coaching and personal attention (Aswathappa 2010:218). A global manager needs to understand the cultural differences in leadership so as to effectively come up with an innovative strategy of leadership. Cultural awareness regarding the cultural differences in the society facilitates effective cross cultural management. Global managers should identify the cultural differences present in the society. Through various cultural models such as the Hofstede 5-phenomena on cultural differences, managers are able to identify the levels of cultural difference in the society. Cultural intelligence is a detrimental factor that enhances intercultural communication. Cultural intelligence involves the identification of cultural differences in the society and the adoption of strategies in order to adapt to these changes. Global managers should have high cultural intelligence in order to minimise conflicts and enhance the development of healthy relationships. Researchers have designed a series of techniques in order to measure cross cultural management. The designed techniques measure the outcome of intercultural communication. Cross cultural techniques perform tasks such as programme evaluation and personnel selection. The techniques enable managers to conduct a cross cultural analysis that enables them to identify the challenges accrued to cultural differences. A cross cultural technique provides managers with information concerning the cultural barriers that they face. Managers may opt to provide coaching and training in order to enhance intercultural communication in the organisation. In conclusion, the cultural model designed by Hofstede has greatly contributed the field of cross-cultural management. This model enables managers to identify the various cultural differences in the society. Managers can use this cultural model to conduct a cross-cultural analysis, which will provide them with relevant information, concerning the cultural differences they face. The issue of culture is detrimental in the business environment. Cultural difference can disrupt business performance and create conflicts in the business environment. Therefore, it is important for managers to adopt effective cross management strategies that will ensure their business success in the global environment. References Aswathappa (2010) International business 4E, Tata McGraw-Hill Education. DeMesquita, B.B. (2004) Negotiation in international politics, Journal of Conflict Management and Peace Science, Ch21, pp. 155-158. Hofstede, J.M. (2007) Culturally questionable? Oxford Business & Economics Conference. Oxford, UK, pp. 24-26. Hooker, J. (2012) Cultural differences in business communication, in the handbook of intercultural discourse and communication (eds C. B. Paulston, S. F. Kiesling and E. S. Rangel), John Wiley & Sons, Ltd, Chichester, UK. Doi: 10.1002/9781118247273.ch19 Junho (2011) The cultural models in international business research: A bibliometric study of IB journals. Centre of Research in International Business & Strategy, vol. 1, no. 76. Kristin, P. (2011) Critical analysis of Hofstedes model of cultural dimensions, GRIN Verlag. Livesey & Lawson (2006) A2 Sociology for AQA, Hodder General Publishing Division. Sadri, H.A., & Flammia, M. (2011) Intercultural communication: a new approach to international relations and global challenges, A&C Black publisher Steers, R.M., Sanchez-Runde, C.J. & Nardon, L. (2010) Approach to international relations and global challenges management across cultures: developing global competencies, Cambridge University Press. Velo, V. (2011) Cross-cultural management, Business Expert Press. Wilson, G.B. (2015) Business communication, viewed 14 April 2015 from . Read More