Global Cultural Challenges - Essay Example

?Global cultural challenges Introduction The face of business is changing rapidly and globalization is the most probable answer to some of the problems faced by businesses. With the world shrinking into a village, easy communications and efficient logistics it is no wonder that businesses think internationally. By going global, a business caters to a larger market increasing the probability of higher revenue and thus more profit. But this greater exposure and market does not come at a low price. Companies decide to globalize if there competencies are relevant, appropriable and transferable to foreign markets but it should also be ensured that these competencies can withstand the barrage of challenges that new markets pose. There are significant differences which are caused by cultural outlook when it comes to working in an organization. Values in the work place are significantly affected by culture. . A study of US multinational corporations found out that poor intercultural management skills still constitute a major management problem. (Deresky) Theories and Models of culture Different researchers and sociologists have proposed different theories about cultural dimensions. Notable amongst these are the Geert Hofstede's theory of cultural dimensions and the 7d model developed by Fons Trompenaars and Hampden-Turner. There is a growing body of research that focuses on how cultures vary. This research ranges from the pioneering efforts of Kluckhohn and Strodtbeck (1961) to the widely referenced approach of Hofstede (1980), to the recent work of Hampden-Turner and Trompenaar (1993). The Kluckhohn and Strodtbeck (Kluckhohn, 1961) model has identified six basic dimensions which cover the cultural orientation in societies. These include people's view of nature, humanity and interpersonal relationships. These also include how people view of activity and achievement; time and space. Hofstede (Hofstede G. , 1980) cultural dimensions provide a more comprehensive analysis of cultural dimensions amongst different nations and countries. He focused on 160000 managers and employers of IBM in 60 different countries and found four dimensions of cultural differences which set these countries apart from each other. These dimensions are individualism vs. collectivism, power distance, uncertainty avoidance, and masculinity vs. femininity and form the basis for work related attitudes. The most recent cultural model is that of Hampden-Turner and Trompenaar released in 1993. 15000 international managers were administered questionnaires and value differences of practitioners of capitalism were identified. These values include: universalism vs. particularism, analyzing vs. integrating, individualism vs. communitarianism, inner-directed vs. outer-directed orientation, time as sequence vs. time as synchronization, achieved status vs. ascribed status, and equality vs. hierarchy. Limitations of the Hofstede model Though these models are very useful in analyzing the culture of different countries but they have certain limitations. First and the foremost the fact that the averages of that certain country do not relate to the individuals of that country and extreme variations may be possible. Thus the Hofstede model can be used as a guide to understand different cultures but is not an absolute dictation. Secondly, the data collected by all these sociologists was collected by different questionnaires and therefore limitations could also be applied to the data that was collected. And lastly since it has been considerable amount of time since that research, it is very much possible that the country's culture has changed either by external or internal influences. (Geert Hofstede cultural dimensions) Analysis of different countries and their cross cultural differences affecting work. The two different cultures selected to analyze are the American and the Mexican culture and the problems which may arise as a result of the differences in cultural values which effect work value and habits. Remarkable differences cause problems at work when American expatriate managers try to manage Mexican employees. Some of these are discussed below American managers are accused of being parochial in outlook and viewing the world from their own camera, their parochialism may greatly affect their effectiveness. Mexicans are very warm and gracious and very hospitable. They are also not regarded as very industrious and a Mexican saying goes that an American lives to work but a Mexican works to live (Mexico). Mexicans are collectivist by nature whereas Americans are highly individualistic. Geert Hofstede's dimensions prove this as USA is the first on the individualism scale whereas Mexico is 32nd. (Hofstede). Mexicans integrate friends, family and work and have very tightly knit families whereas Americans have very separate work and personal lives. Mexican culture has a very high uncertainty avoidance dimension of 82. (Hofstede). This implies that the society possesses a very low level of tolerance for uncertainty. Thus Mexicans are very rule oriented and risk adverse. They do not accept change readily. Americans are generally more comfortable with risk taking and they have an uncertainty avoidance dimension of 46, thus those managers are avid risk takers. These and other significant differences like a very masculine culture will make it difficult for a parochial manager to enforce his outlook on Mexicans. A parochial manager might not understand that why a Mexican employee has difficulty taking instructions from a female or might reprimand him for taking too many days off for a family reunion as these concepts are alien from his culture. He might also not learn any Mexican languages thus gathering resentment from his Mexican employees. A parochial manager might adopt risky strategies which his employees will not like because of their general liking for structure and stability. An American manager after studying Mexican culture might assume that since Mexicans are low on the individualistic scale, they will be able to work collectively in teams. This assumption does not prove to be true. The traditional team structure faces obstacles in Mexican culture (C.E Nicholls, 1999, pp. 15-27)as they are very used to a hierarchal structure of organization. Thus a manager's formation of teams and assumption that they will take full responsibility might result in counteractions. The stereotype that Mexicans are assertive and aggressive can be very helpful in the work place. (Leidner, 1999. Pg5-11) by these notions a manager should expect quick decision making from Mexican employees who will not be very interested in details. This is particularly true of Mexican workers who will take decisions quickly and impulsively and the manager should be well prepared for it. The typical American way of giving a raise or increasing the wage of a worker might not work in Mexican cultures. This is so because Mexicans value family and the quality of life above money. This is derived from their highly collectivist nature. In Mexican culture title or position represents status, thus giving a person a higher position and authority would motivate him (Kras, 2006). This stands true because unlike Americans who are more concerned about financial compensation, Mexicans are more concerned about how the society views them. Motivation can also be increased by giving reward such as more holidays when needed or inquiring about family and friends Expatriate managers: Problems and difficulties Expatriate managers in foreign countries also face a lot of resentment and therefore it should be ensured that managers being dispatched to different countries are provided added incentives to boost their morale. Added support should also be provided in form of accommodation and help in finding jobs for their spouses. Not only that, they should also be provided adequate development and training about the host country. . In order for expatriates and their families to function successfully in another culture they must learn the differences in behavior that exist across cultures (Harris, 1991) Expatriate managers have to be trained accordingly as many studies show that expats fail at their jobs because of inability to understand and adjust. Black and Gregersen (1999) found that nearly one-third of U.S. managers sent abroad do not perform up to the expectations of their superiors. Thus cultural orientation by multiple means such as communication, basic conversational knowledge and pre-departure training to families should be provided. According to Kline The first stage of general cultural orientation is designed to focus trainees' attention and better prepare them for cross-cultural encounters in general (Harris & Moran, 1991) which includes self assessment of influential factors and cultural awareness of general dimensions. The second stage is specific cultural orientation which develops the trainee's abilities to interact effectively in the specific culture that is assigned to them. This includes knowledge acquisition and skills training. (Kline, 1994) Expatriate managers should also be equipped with the abilities to deal with change which is the greatest obstacle to cultural adjustment. (Aviel, 1990). Since the initial reason why individuals resist change is that they are scared of the consequences of the change changing them, this fear should be anticipated and dealt beforehand. Individuals if pre-informed about the change will anticipate it and thus lead to a reduction in their anxieties. Listening effectively, providing counseling, and developing an understanding of emotional reactions to change are particularly helpful in situations where people are resisting because of adjustment problems. (Schlesinger, 1979) Therefore managers should be provided adequate information about the benefits, purpose and value of their work. It also includes personal counseling, listening to their reactions and concerns, and responding to their individual needs. Thus the motivation and readiness of trainees regarding cultural change can be enhanced. Another important aspect of cultural change and change of location is the stress which comes associated with it. Recent studies have found that the ability to deal with stress enhances the potential for effectiveness overseas (Walton, 1990). Studies by Mendenhall (M Mendenhall, 1985) also show that the anticipation, preparation, transition, and adjustment associated with cross-cultural assignments are fraught with potential sources of stress. Thus expatriate managers should also be equipped with adequate stress busting resources and the company should try to reduce possible stressors from the manager's life. These can include handling of the residential and child education hassle by the company or by help in finding the job for the spouse. Another important aspect of information provided to expatriates is Area studies that are giving them knowledge about the history, geography, climate, demographics, economy, political system, and industrialization of their host culture . (Ronen, 1990)The basic assumption behind area studies is that knowledge will increase empathy, which in turn will modify behavior in such a way to improve cross-cultural relationships (Tung, 1981) Specific information about the host country will further put them in sync with the country they will be visiting and increase their chances of success. A variable format can be provided for area studies which includes readings, group discussions, lectures, films, audiotapes, or videotapes (Brislin, 1979) Lastly the most important of all is providing expatriate with communication skills. Basic conversation skills are necessary for all managers as it will ensure that they don’t feel alienated. Language studies are necessary to permit managers to be efficient and competent in cross cultural situations (Copeland, 1985). Though English is a major international business language but the assumption that it can help in all cross cultural situations is not valid. An overwhelming majority of the world's population neither understands nor speaks English and for most of those who learn it as a foreign language, it remains precisely that (Harris P. R., 1991). Therefore the acquisition of language skills by expatriates and their families is of prime importance. Competencies required by an international manager An international manager has to be culture savvy and he should develop an understanding of different people. The first approach is that a company should develop a profile of every country it is either doing business in or considering doing business in. Managers must identify the difference in different countries in universal cultural indicators. Knowledge is power and truly it is the adequate knowledge of a country's culture which will allow the company to stay afloat in a very different environment. Secondly a company must realize that they cannot transplant the home country's management style in the host country. This will cause a lot of resentment in employees. Rather the company should adopt a policy of contingency management. Contingency management implies that the manager adapts to both the local culture and business style of the host country though retaining a few important company practices. Managers should also understand that there are various subcultures in a culture which can vary greatly. They might be very different from the stereotypical national culture and adequate information about them is also necessary. A UK company might very confidently extend their business to Canada assuming that language will not pose a problem there but an encounter with francophones and indigenous Canadians might prove otherwise. Though flexibility and its importance is not new to organizational success, but it is vital for managing operations globally. The company should be extremely adaptable and compromising. It should avoid practicing both parochialism and ethnocentrism as it may cause a disregard in the mind of its customers and local employees. Conclusion It should be realized that there is no concrete absolute measure for overcoming cultural barriers nor are there any die hard rules but it is done mostly by gradual learning, knowledge acquisition and the implementation of that knowledge. Flexibility and adaptability is of prime importance when working internationally as the great variations in culture require measures which are at times not acceptable in home country. Another important requirement is tolerance of home country nationals and an understanding that different backgrounds can lead to different life and work perspectives. Nevertheless an expatriate manger should be equipped with all information about the host country and should be familiar with the language to make his work transition easier. References Aviel, D. (1990). "Cultural barriers to international transactions. 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