Overcoming Challenges in Cross-Cultural Diversity & Conflict - Term Paper Example

 Report on Overcoming Challenges in Cross-Cultural Diversity & Conflict Table of Contents I. Summary…………………………………………………………………………………..3 II. Introduction………………………………………………………………………………3 Theoretical Base: Hofstede’s Five Dimensions of Culture…………………4 1. Collectivism vs. Individualism……………………………………….4 2. Power Distance…………………………………………………………5 3. Uncertainty Avoidance………………………………………………..6 4. Masculinity/ Femininity……………………………………………….6 5. Time Orientation of Goals……………………………………………6 III. Findings From the Review of Research Literature……………………………...7 Cultural Profiling of Russians and Danes……………………………………7 Possible Sources of Cross-Cultural Conflict………………………………...10 IV. Conclusion……………………………………………………………………………..11 V. Recommendations to Managers…………………………………………………....11 VI. References…………………………………………………………………………….16 I. Summary In the case of merging two different cultures in business, many factors need to be considered in order for people to work together harmoniously. Key to understanding cultural differences are theoretical foundations that explain them. This report specifically investigates the differences in culture between Danish and Russian workers, the possible conflicts that may arise and recommendations to our managers on how to manage such conflicts. II. Introduction In this age of globalization, there is much controversy on the coming together of all kinds of people for a common purpose. In an environment with people from different cultures work together, one needs to understand the culture where another comes from if harmony is to be achieved. Culture is defined as “the collective programming of the mind which distinguished the members of one human group from another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture” (Hofstede, 1994). From this definition, one can perceive how much influence culture has on people. This is markedly felt in an international environment. If people are considerate and understanding other cultures, and makes the necessary adjustments to accommodate the needs of others, then they can earn the cooperation of others. On the other hand, if they insist on promoting their own culture and their value system, whether it agrees with others or not, then it can be surmised that sooner or later, the personal relationship will encounter major conflicts. This analysis is logical and general, but it goes without saying that there is more than meets the eye. Theoretical Base: Hofstede’s Five Dimensions of Culture Hofstede’s work has provided a seminal framework for understanding cultural value orientations and their effect on the workplace. His efforts culminated in a mass study that established typologies of over 50 countries, evaluating attitudes towards power distance, uncertainty avoidance, societal orientation, social gender and time 1. Collectivism vs. Individualism Hofstede and Peterson assert that “collectivism implies a link between the individual’s self-identity and a collective, whereas individualism implies that the two are more fully distinct” (2000, p.408). It must be noted, however, that the individualist sees the distinction between self and other as the defining characteristic of social interaction, whereas the collectivist sees the distinction between in-group and out-group as paramount in social interaction. This results in the notion that collectivists do not believe that social interaction is fundamentally universal in nature; there is always a self and an other that allow an individual in any type of society to identify more closely with some (Michailova and Anisimova,1999). For example, research shows that “European Americans have been found to dominate conflict situations while Asians and Asian Americans tend to either avoid conflict or to oblige the other party. A high degree of individualism has been attributed to the use of a confrontational- oriented style among Euro Americans, while greater collectivism and a desire to avoid loss of face have been attributed to the use of more passive and accommodating conflict styles among Asians and Asian Americans.” (Khoo, 1994). A lot has to do with the personality and cultural upbringing of the conflicting parties. Strong personalities usually dominate and crush the conflict into oblivion by claiming their stake. More cooperative parties integrate their ideas and compromise for a “win-win” solution to the problem. Some subservient ones just oblige in spite of their own opinion to avoid conflict. 2. Power Distance Power distance refers to the differing levels of power individuals possess. High power distance typically results in a greater sphere of influence of managers over subordinates. However, a high power distance does not necessarily ensure compliance or attitudinal agreement (Hofstede and Peterson, 2000). In theory, influence breeds respect between a manager and subordinate, and the subordinate will defer to the manager’s instructions. But complying with direction does not mean a subordinate agrees with nor respects a manager. It simply means that, in high power distance cultures, subordinates recognize the position of the manager as one of greater authority and power. According to Hofstede and Peterson, “superiors’ ability to use specific directions to shape compliance by employees who are reluctant to express disagreement is quite different from their ability to shape attitudes and beliefs” (2000:407-8). Thus, power distance only measures a manager’s degree of influence but does not contend that managers have any actual effect on subordinates’ value systems. Creating an inclusive environment involves organization culture and culture change (Young, 2007). It takes re-evaluation of long-held beliefs and practices to accommodate such change. For instance, power distance may intimidate some minority groups from being participatory in the organization. In a typical hierarchal organization, the dominant groups control the resources and hold the power to set rules. Organizational change shortens the power distance form the top to the bottom of the pyramid (Young, 2007). 3. Uncertainty Avoidance Uncertainty avoidance describes the reaction of a group to that which is different or unfamiliar (Hofstede and Peterson, 2000). Typically, those cultures that are allowed more freedom to define themselves as individuals experience a lower level of uncertainty avoidance, whereas cultures that stress conformity tend to experience higher levels of uncertainty avoidance. Culture and group formation themselves are the result of a desire to reduce uncertainty, as membership in a particular group defines value systems and provides a framework for behavior. 4. Masculinity/ Femininity According to Hofstede and Peterson (2000), values typically associated with a particular gender have been part of social science research for decades. Hofstede’s work was the first to translate these gender-based values into a culture context. Cultures tending towards masculine values are associated with more ego-based principles, whereas cultures tending towards feminine values more closely associate with social goals. 5. Time Orientation of Goals This pertains to what people prioritize in terms of time. Values such as thrift and perseverance (long-term) vs. respect for tradition, fulfillment of social obligations, and protections of one’s “face” (short-term) may be leveled depending on how the culture gives significance to it. This time dimension was not one of Hofstede’s original four – it was only developed in 1988. III. Findings From the Review of Research Literature Cultural Profiling of Russians and Danes Hofstede’s Dimension of Culture Denmark (from: Hofstede) Russia (from: Naumov, A.I. & Puffer, S.M., 2000) Power Distance 18 40 Individualism 74 41 Uncertainty Avoidance 23 68 Masculinity 16 55 Knowledge on cultural theories go a long way in understanding cultural differences among people in a multicultural environment. In analyzing how Russians and Danes are different, managers should keep in mind the theoretical explanations of such. From the table, a wide gap in power distance scores is observed between Russia and Denmark, implying that the Russians perceive the power of persons in authority to be respected. It also implies that Danes may be more comfortable in the company of people in positions of power and do not get easily intimidated by them. The table also shows that Danes are more individualistic than Russians as shown in their scores. This implies that Danes are more comfortable working on their own while Russians value collective participation. In terms of Uncertainty Avoidance, the table shows that the higher score of Russians imply that they are not very comfortable with things they are not familiar with while Danes are more open to learning more about unknown information. The Masculinity dimension shows that Russians have a much higher score than the Danes, which implies that Russians value ambition, performance and fortune more than more socialized values such as quality of life, service and people-orientation. On the other hand, the scores imply that Danes are more inclined to value people, character and society. Russians may be perceived to have more masculine traits such as being assertive, competitive, tough and results-oriented while Danes may be perceived to possess traits more associated with feminine ones such as being modest, cooperative, nurturing, tender and equity-oriented (from class notes). This shows that Russians and Danes are very different in terms of many qualities that are influenced by their respective cultures. Generally, Russians are less formal, and prefer relationships with colleagues to be so too. They are not regimented in their planning and decision-making skills and pursue goals right away. Danes are more deliberate in their thinking and do not mind spending time bouncing ideas back and forth before coming up with a final decision (Anisimova, 1999). This agrees with their low score in the Uncertainty Avoidance dimension in the table above. In terms of Trompenaar’s Cultural Dimensions, Russians may be considered synchronous in their use of time, while Danes may be considered sequential in their use of time (Meaning and Dimensions of Culture, n.d.). From this difference alone, conflicts and ill feelings may ensue if both parties are not enlightened as to the background of the other is and understand where they are coming from. The present cultural qualities of people may stem from the history they shared as a nation. The table does not provide data on Hofstede’s cultural dimension on time orientation for Denmark and Russia. However, research shows that in terms of planning, the Danish interpret it as a long term activity. Time invested on it is not regretted since the planning products are used as a management tool which is instrumental in evaluating work progress. On the other hand, Russians do not like to spend much time in planning, seeing it as a waste of time instead of diving into action. They do believe it is important in the short term level. There are some issues that can be planned a maximum of one year ahead such as concerns related to big stable customers, otherwise, they believe long term planning is fruitless since everything in Russia changes so quickly (Anisimova, 1999). When it comes to decision-making, both cultures are poles apart. Russians treat information as a source of power, status and authority rather than as a basis for making decisions, as viewed by the Danes. Danes see efficiency, predictability, professionalism and modernity as key forces for rationality while Russians believe in fate and destiny and tend to make decisions on the basis of intuition. This agrees with the implications of the scores on uncertainty avoidance reflected in the table. Russians have a strong need to be asked for advice in the process of decision making at a more operational level, if not, then they see that as a lack of respect for their opinions (Anisimova, 1999). The Danes arrive at a decision after much deliberation to ensure that the final decision will work for the benefit of the majority. They do value a collective decision, and gather their strength from teamwork. Group discussions, coordination of actions and the need to reach a consensus from the giving and receiving of feedback is considered a crucial process in decision-making. The Russians, on the other hand, perceive the collective mode of decision making that entails long discussions aimed at reaching a consensus, as a slow, non-flexible and inefficient way of arriving at a final decision. They value speed and flexibility more and believe in being more results-oriented than being process-oriented (Anisimova, 1999). Thus, individualized thinking and decision making is viewed as a faster way to reach the necessary goals (Eisenhardt, 1990). This finding disagrees with the scores on the Hofstede’s Cultural Dimension scale depicted in the table above which shows that Danes are more individualistic and Russians are more collective. Possible Sources of Cross-Cultural Conflict It is most likely that conflicts arise in environments with different cultures. Most conflicts that surface in intercultural settings are caused by miscommunication and misunderstanding. Managers must fully understand the ethical considerations of Russians and Danes, as they may be subject to interpretation. “The reason there are cultural differences is because there are differences in how the situation is understood. Almost everyone agrees that ‘ethics’ is doing the ‘right thing’ but how to reach an ‘ethical’ decision is open to debate.” (Brisbane Institute, 2005). Coming up with a final business decision depends on situational factors such as organizational goals, organizational codes of ethics, the legal environment and the perception of the other party. National culture influences these factors. Organizational goals may be set but people from different cultures may have different approaches in reaching them. The organizational code of ethics plays an essential role in the way a business is handled. Negotiators who are advised that the culture of the business they are interested in adhere to a code of ethics which is deeply ingrained in the workers and is expected to be practiced by everyone would think twice in using ethically ambiguous strategies to get ahead. “There will also be cross-cultural differences in how code of ethics are understood depending on the familiarity with, and tradition or longevity of, codes of ethics within individual business organizations.” (Brisbane Institute, 2005). In terms of merging two different cultures in one organization, so much more need to be considered when communicating about the company’s philosophy and goals. In our case as a Danish company wanting to acquire a Russian company, cultural dimensions need to be studied. It is essential that no matter who they are, employees’ values must be aligned to the company’s. Differing values create conflict and will impede goal achievement. According to Mishra and Morrissey (1990), the following factors propagate trust: open communication; giving workers a greater share in decision making; sharing of critical information and true sharing of perceptions and feelings. This is consistent with the views of Eisenhardt (1989, 1990) who concludes that companies should reflect on three things when analyzing a group’s perception in planning and decision-making: the sharing of information, their current orientation in the company and take on the issues concerned, and their intuition. IV. Conclusion Global trends point to the formation of inclusive organizations that welcome people from all walks of life to contribute their ideas, talents and efforts to the pursuit of organizational goals. Our organizational plans as a Danish company to acquire a Russian company is faced with several challenges regarding cross-cultural issues. However, if people learn to accept, respect and appreciate others no matter how different they are, then it is a huge step to achieving the elusive harmony in a totally diverse environment. Much depends on the efficiency of our own managers. This report is evidence that it is possible for them to be successful in our goals. V. Recommendations To Managers Having established that conflicts are bound to surface in highly diverse environments, how can these be mediated, if not prevented? It is vital that the source of conflict is examined. Personal backgrounds need to be studied to be able to understand where the conflict is coming from and to predict future behavior. Explaining differences in a non-threatening manner may just be the key, if conflicting parties are mature individuals. Managing cross-cultural work environments entails much investment on the part of the managers. Having considered all factors related to cultural backgrounds and differences, the following advise is addressed to our managers, as learned form the study of Michailova and Anisimova as well as the research literature. These go a long way in terms of long-term goals for the merging of the two diverse cultures. 1. Effective Communication In the initial meeting, both our Danish managers and the Russian counterparts should lay everything on the table on what they expect with the proposed business merger. A well prepared presentation on the detailed plans as well as a written document to supplement it should be provided to and agreed upon by the Russians. Any questionable detail should be brought up and discussed thoroughly to ensure that negotiations are acceptable to both parties. Management must be consistent in communicating to each worker its philosophy, mission and vision. Each worker should be able to feel that he is part of a great team that sets high goals and successfully attains them. “Creating the conditions that engender knowledge transfer entails significant structural and cultural changes by top leadership, which will require leaders to be convinced that the benefits of knowledge transfer outweigh the costs. In the absence of this commitment, it is unlikely that attempts to increase knowledge flow will succeed (Burgess, 2005). 2. Knowing the Local Culture and Appointing A Credible Local Counterpart Still on maintaining effective communication and good faith with the Russians, our managers should propose that we get to know their culture better to better understand each other in how we live and conduct business. If not, it is inevitable that problems to disrupt the harmony of the business relationship and possibly the business operations will prevail. As foreign managers, Danish managers must be sent to Russia to be aware of the local culture so they would know how to adjust. They should also invest in getting to know the the local employees. Next, among these locals, select and appoint members with English language capabilities to help the foreign counterparts learn the Russian language. This willingness to learn the local language will be seen as a sign of respect for the Russian colleagues and their culture (Michailova and Anisimova,1999). Another recommendation is to pay attention to how headquarters in Denmark handles the communication flow with the Russian subsidiary and rectify any erroneous practices to preserve harmony of communication and relationships between cultures. 3. Apply Top-Down Perspective in Decision-Making Although we encourage independent thinking, a possible risk could be wrong decisions made by some local managers in Russia that could be costly to the business. This is not to say that the locals are not trustworthy, but it is best to hold the wheel especially in major areas of the business. It is recommended that when making decisions, managers need to be more open to apply top-down oriented techniques. Our Danish managers need to adjust to the host country’s known systems in management, and in terms of decision making, the Russians respect decisions coming from top management even if they are left out in the process of arriving at the final decision. This has been reflected in their high score on Power Distance. 4. Form Short-Term Goals with Local Workers Since the business will be owned by Danes but situated in Russia, and since Russians are not in too deep on long term planning especially if the business is not entirely theirs, Danish managers should be able to formulate short term oriented tasks with achievable and observable results when introducing strategic plans (Michailova and Anisimova,1999). Giving their long-term plans may alienate the Russian representatives, as they are aware that the company will no longer be theirs in the long-term. 5. Investment in Professional and Personal Development The high uncertainty avoidance score of the Russians show that they are not comfortable with things they do not know about. It should be offered in the initial meeting that on the side of human resource management, managers are ready to invest in the professional and personal development of all their workers. Full-fledged diversity management, as opposed to a mere sensitivity training class, requires a radical upending of basic assumptions, patterns, and structures. Also, regular trainings and participation in seminars or enrollment in courses shouldered by the company (whether partial or full) may be perceived as part of the job, but it should be communicated to the employees that although application of their learnings will highly profit the company, ultimately it will redound to their own benefit. This knowledge from trainings is bound to increase their market value. 6. Regular Evaluation and Follow Up Being aware of diverse employees’ gripes and complaints as well as constructive suggestions may be brought up to the proper authorities and dealt with seriously. It should be made clear to the Russians that regular evaluation of company performance should include the assessment and feedback of employees of their employers and employment. Managers should not be remiss in this duty of bridging communication or else employees may perceive management to be incompetent. “This negative perception could also lead to widespread problems satisfying other psychological contract obligations. This may be particularly troubling because it may often be the responsibility of an employee's manager (acting as the organization's agent) to see that the individual's psychological contract is fulfilled.” (Lester, Clair & Kickul, 2001, n.p.) 7. Other Recommendations With the imminent initial meeting of the Russian and Danish representatives, the above-mentioned advise may be discussed to make the Russians aware of the Danes’ good faith in the forthcoming merger. However, our Danish managers are well-advised to keep the following in mind during the meeting and all throughout their working relationship with the Russians. Mead (1994) summarizes some guidelines in managing cross-cultural diversity in the workplace and motivating these diverse workers in the performance of their tasks in the organization. A. First is to value the exchange of alternative points of view. This fosters thinking “out of the box” and brings fresh perspectives into the organizational thinking. B. Another guideline is to tolerate uncertainty in group processes. This may even strengthen the bond of the members as they strive to pursue best options together and cooperating to come up with a group decision is key. C. Still another one is to respect each other’s experiences and share one’s own, as this enriches each other’s knowledge and possibly increase understanding and tolerance of differences. D. Finally, use the exposure to other cultural values as opportunity for learning. Everyone stands to gain from learning about others. In following these recommendations, it is hopeful to expect a fruitful beginning of harmonious intercultural relations between the Danish and the Russian workers. VI. References Anisimova, A. 1(999). Organizational culture and crosscultural relations: the case of a Danish company in Russia.Paper presented at the CEP conference “Cultural transformation and civil society”. May. Krakow Brisbane Institute, Business Ethics, 2005 Burgess, D. (2005) What motivates employees to transfer knowledge outside their work unit?. The Journal of Business Communication. Volume: 42. Issue: 4 Eisenhardt, K. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management Journal. 32 (3): 543-576 Eisenhardt, K. (1990). Speed and strategic choice: how managers accelerate decision making. California Management Review. 32 (3): 39-54 Hofstede, G.(1994) Cultures and Organizations: Intercultural cooperation and it’s importance for survival –software of the mind, London: McGraw- Hill/HarperCollins Hofstede, G. and Peterson, M. (2000) ‘National Values and Organizational Practices’, in N. Ashkanasy et al (Eds.), Handbook of Organizational Culture, Thousand Oaks, CA: Sage, 401-415 Khoo, G P. (1994) The role of assumptions in intercultural research and consulting: Examining the interplay of culture and conflict at work. Paper presented at Pacific region forum on business and management communication, David See-Lam Centre for International Communication, Canada, November, 1994 Lester, S. Clair, E, Kickul, J. (2001) Psychological Contracts in the 21st Century: What Employees Value Most and How Well Organizations Are Responding to These Expectations. Human Resource Planning. Volume: 24. Issue: 1. Meaning and Dimensions of Culture (n.d.) Retrieved on January 24, 2010 from cba.winthrop.edu/riddlee/MGMT529_S09/Hodgetts4_S09.ppt Mishra, J., & Morrissey, M. A. (1990). Trust in employee/employer relationships: A survey of West Michigan managers. Public Personnel Management, Vol. 19, No. 4, winter 1990, pp.443-463. Naumov, A.I. & Puffer, S.M. (2000) Measuring Russian Culture using Hofstede’s Dimensions. Applied Psychology: An International Review. Vol. 49, No. 4, pp. 709-718 Young, C. (2007) “Organization Culture Change: The Bottom Line of Diversity” The Diversity Factor, Winter 2007/ The Changing Currency of Diversity Volume 15, Number 1 Read More