Cross-Cultural Management - Essay Example

?Running Head: CROSS CULTURAL MANAGEMENT Cross Cultural Management of the of the Cross Cultural Management Part Introduction The term culture, whether it is applied to a country or a particular organization, or a profession, has been widely used by scholars as an exploratory variable. Researchers indicate the persistence and continued relevance of cultural diversity as related to management in the business settings. Dunning (1997) asserts that managing cultural diversity is central to business research and that "firms, which are best able to identify and reconcile differences, or even exploit them [cultural differences] to their gain, are likely to acquire a noticeable competitive advantage in the marketplace" (p.196). Researchers studying the success of cultural diversity programs have identified models that can be implemented into organizational environments. Having support for of senior management for diversity programs is identified as a major theme among most of the program models (Matton & Hernandez, 2004; Jayne & Dipboye 2004). This paper will examine the background of diversity in organizations, benefits of workplace diversity, challenges of diversity, popular diversity management models, the relevant research related to the importance of having support of senior management for diversity programs, and the individuals responsible for implementing diversity programs, that is, the diversity practitioner. Overview Workplace Diversity and its Importance Diversity can be defined as, "a mix of people of different socially relevant group identities working or living together in a defined social system" (Cox & Beale, 1997, p.13). Healthy workplace diversity can provide an organization with the tools to improve problem solving, enhance marketing, be more creative and flexible, and ultimately improve productivity and "the bottom line" (Thomas, 2006; Cox, 1994). While a company may recruit in order to create a climate of diversity, it can simultaneously open the door to truly hiring the best available talent in the global market instead of another "company man." Diversity promotes a multiplicity of viewpoints, thus creating the potential to generate more creative ideas and stimulate consideration of non ­obvious alternatives (Kyriakidou, 2009). Further, diverse groups bring a broader and richer base of experience. This dynamic tends to create a higher level of critical analysis and a lower probability of "group think" (Cox, 1994). For example, studies show that women tend to be more tolerant of ambiguity than men. As a result, they tend to excel in completing tasks that are cognitively complex and/or ambiguous. Individuals with bilingual capabilities are another group that demonstrates a great capacity for flexibility. Thus, workgroups that incorporate individuals with these characteristics are likely to demonstrate greater group cognitive flexibility (Cox, 1994). With the minority population growing, organizations are finding the need to adapt products, advertising and services to appeal to diverse interests. Studies show that members of minority cultural groups are more likely to give patronage to representatives of their own cultural group (Cox, 1994). Thus, organizations find the need to have their workforce mirror, at least in part, their clientele. In the for-profit sector, it has been seen that the evolving demographics in the United States have had a significant impact on the manner in which products currently need to be marketed in order to maintain or increase market shares. For example, Cox (1994) notes two examples of cosmetic companies, Avon and Maybelline, changing either their product or transferring the management of an otherwise unprofitable market of minorities, to people of color. Under different management these companies have adapted their products using shades that are more palatable to people of color and have reflected these changes in their advertisement. The results have been very positive and profitable for these companies in a previously unprofitable sector (Cox, 1994). Cultural competency is seen to be key in surviving these changes in the face of the United States. Provided that a company or agency seeks to create a welcoming climate, the ultimate result of diversity in the workplace should be an increase in productivity and job satisfaction. Productivity is an integral outcome of job performance, while job performance appears to be affected by issues of social identity (Northcraft, Polzer, Neale, & Kramer, 1995). In a healthy diverse setting, the social identity of diverse individuals is affirmed and valued. When environmental conditions exist where individuals are affirmed and valued there is greater job satisfaction, higher morale and increased job performance. Further, the final outcome appears to be an increase in overall effectiveness of the organization (Jehn, Northcraft, Gregory, & Neale, 1999). Challenges associated with Workplace Diversity Alongside the advantages, diversity can bring with it many challenges. Among them are conflicts, lack of cohesion, turnover and absenteeism, resistance to change, potential lowering of morale, and, as a result, lower productivity (Cox, 1994). According to Cox (1994) there are two main contributors to conflict in the workplace due to diversity issues: 1) group boundaries and group differences are involved and 2) the conflict is directly related to cultural group identities. Examples of these conflicts can range from power issues to subtle misunderstandings. Cox identifies a number of studies that indicate when minority populations reach a certain percentage of the entire workforce within an agency, the white male majority perceives the rise in a threat to the existing power structure. As a result, interpersonal dynamics in the work environment can become hostile and antagonistic (Cox, 1994). Intertwined with the issue of conflict is the concept of self-identity. Self­ identity is arrived at by assessing what group or groups one associates with. Thus, in a work environment there are likely to be categorizations of the "in groups" and "out groups" (Northcraft et al., 1995). An example of "in group" vs. "out group" memberships can be seen in the contrast between a white, male member of the Masons and a Latino, female member of the Ecuadorian Club. The first belongs to three groups that are associated with potential positions of power and influence while the later is associated with three groups perceived as having little to no influence. The degree of difference between these two is seen as creating a potential for a tense dynamic in the work environment. Further, when "in group" status is valued over diversity and/or achieving the organization's identified goal or mission, such tensions become elevated (Northcraft et al, 1995). Related to the issue of identity is the concept of cohesion. Some theories on this issue conclude that individuals are attracted to other individuals like themselves (Allison, 1999; Cox, 1994). Such attraction has the potential to foster more cohesion in homogenous work groups. One theory on social comparison proposes that individuals tend to seek homogeneity either through creating it by choice or through social pressures to conform. When diversity threatens homogeneity in language and perspective, the result can be a weakening in the cohesiveness of the group, and subsequently in the performance of the group (Cox, 1994). This breakdown in the cohesion can then lead to lower morale, which in turn can lead to high absenteeism and high turnover. Ultimately, these trends could lead to lower productivity and financial loss to a company (Cox, 1994). Finally, there is the issue of resistance to change. Resistance can be rooted in issues of prejudice, discrimination, inflexibility, insensitivity or a resistance to personal growth in addressing issues that typically would be considered taboo (Allison, 1999). Often it has been found, especially in settings with an established "old boys" network that there is an attitude of institutional inertia (Allison, 1999). There is little recognition or commitment to change how an organization may operate. Given that the workforce demographics are changing and will continue to change, companies and agencies will be forced to adjust while creating a climate with the potential for divisions. One study suggests that "value diversity," not "social diversity," is the cause of such divisions (Jehn et al., 1999). For example, a white male and African American female may have more similar values on issues of family-life and politics than the same white male with another white male. This study indicates that it is the respect for another's core values that allows individuals to work together while they share values that are key to the achievement of organizational goals. It should be anticipated that conflict will arise in diverse workforces, but the challenge is not in the avoidance of conflict but the management of it. Research indicates that it is through such management that creativity arises and members of an organization are challenged to consider other views and possible solutions to the same problems (Jehn et al., 1999). Part II: Analysis: How to Manage Workplace Diversity? Diversity Management Strategy Diversity theorists have developed a number of diversity management strategies based on the theory of organizational development and organizational change. The goal of diversity management strategies is to develop a process that transforms the organizational environment into one that manages, values, and leverages diversity in order to improve organizational effectiveness (Wheeler, 1996). Allen and Montgomery (2001, p. 155) highlight an example of institutionalizing diversity change based on Lewin's (1951) change model which describes organizational change as progressing through successive stages called unfreezing-moving-refreezing. The unfreezing phase involves getting the forces advocating change to be increased to the point that they overcome the forces resisting change. These can be serious forces such as financial problems, high profile lawsuits, or public relations problems; or, gradual forces such as leaders deciding to embrace diversity in order to increase the competitive advantage of the organization. The unfreezing process involves gaining commitment from organizational leaders, obtaining resources, and developing the goals of the diversity program. The moving phase involves implementing the identified diversity programs that will help the organization reach its desired goals and objectives. Examples include recruiting and outreach programs, training and education, and mentoring and career development programs (Wheeler, 1996). The refreezing phase involves institutionalizing organizational policies and procedures as well as a reward system that supports the newly implemented initiative. Some diversity researchers have developed models for implementing diversity in organizations. Researchers believe that each strategy identifies a series of important steps to the implementation of diversity programs. The premise is that in order for diversity programs to be effective, each of the steps should be followed. Table 1 Strategy Models for Implementing Diversity Programs Authors Strategy Steps Gilbert & Ivancevich, (2000) Cox (2001) Matton & Hernandez (2004) Jayne & Dipboye (2004) Step 1 Make the case to top management that managing diversity is a contributor to organizational performance Leadership - establish a direction or goal (vision) for change, provides sense of urgency. Leadership at various levels of the organization Build senior management commitment and accountability Step 2 Construct a plan to achieve diversity Research & measurement - assess the organization at multiple levels Strong diversity/ compliance professional Conduct a through needs assessment Step 3 Develop ongoing education program Education – help people learn new information and skills related to the change. Employee involvement Develop a well-defined strategy tied to business results Step 4 Develop hard measures of diversity benefits Alignment of management systems - align organizational policies, rules, and procedures to support the change. Ties to performance evaluation and reward system Emphasize team- building and group process training Step 5 Follow up implementing action, establishing accountability for results, and evaluation. Availability of communication of data and other relevant information Establish metrics and evaluate the effectiveness of diversity strategies Thomas (2004), in his article "Diversity as Strategy", examined the steps that one organization followed in order to integrate a diversity program into the culture of the organization. Thomas' (2004) diversity strategy along with the other strategy models for the implementation of diversity programs highlight the importance of senior management or leadership support and commitment to the successful implementing diversity programs. Therefore, identifying the strategies that have been effective at building senior management support could serve as an important factor to the outcome of diversity programs. Relevant Research on Diversity Program Success and Senior Management Gaining the benefits of cross cultural management can be difficult for many organizations. A survey conducted by Willmot (2003) of 1,400 human resource practitioners revealed that many of these professionals believe that not enough support for diversity issues from top management is one of the factors leading to the failure of diversity programs. Many diversity theorists emphasize the importance of gaining the commitment and support of senior management in order to achieve success in diversity programs (Allen & Montgomery, 2001; Cox, 2001), and researchers who have empirically studied the importance of senior management in the success of diversity programs also find that having support of senior management is important to the success of diversity programs. Gilbert & Ivancevich (2000) conducted a comparative, in-depth, qualitative analysis of two organizations at different stages of managing diversity through interviews with human resources professionals, review of company archives, and personal observation. They concluded that CEO initiation and support is important and had consequences for the success of efforts to manage diversity. In a similar study of 10 organizations, Matton & Hernandez (2004) examined companies that had well-established, or rapidly emerging, diversity and EEO/ AA efforts. The purpose of the study was to identify factors associated with successful diversity initiatives, through open-ended interviews with 12 diversity and compliance professionals. Their results indicate that leadership at various levels is seen by these professionals to be a critical factor that contributes to diversity program success. Thomas and Ely (1996) conducted a six-year, three-part research study of 12 organizations to determine in part how leaders influence whether diversity becomes an enhancing or detracting element in the organization. Through interviews, surveys, archival data, and observations the authors concluded that having leadership that is committed during the long process of learning and relearning to transform the organization is an important determinant to the success of diversity programs. In a larger study, Rynes and Rosen (1995), who surveyed 785 human resource professionals, concluded that the factor most strongly related to successful diversity training was the perception by employees that top management supports the initiative. Hart (1997) identified common themes from 400 executives interested in learning how their peers approached diversity and concluded that gaining executive buy-in from top down was a primary factor in the success of diversity initiatives in organizations. Wentling (2000) conducted research with 30 multinational corporations in the Midwest from the 1994 Directory of Diversity in Corporate America. The purpose of the exploratory study was to determine the factors that assist and hinder diversity in multinational corporations. Through face-to-face, semi-structured interviews with diversity managers or directors responsible for diversity, and document analysis, the results indicate that 100% of the respondents identified top management's support, endorsement, and commitment as factors assisting in the success of diversity initiatives. In summary, research indicates that an important factor that has been attributed to the success of diversity programs is senior management support and commitment. Relatedly, Wentling's (2000) research indicates that a factor that has been identified as a barrier to successful diversity programs is lack of senior management support and commitment. The Diversity Practitioner Kotter (1996) indicates that the success of any change initiative depends on the ability of the change leader to carry out a strategic process. For diversity programs, diversity practitioners are the individuals challenged with developing and leading these initiatives. They are the individuals responsible for the design and implementation of diversity programs in organizations. Diversity practitioners are knowledgeable experts on the methods and the effects of diversity on organizational environments. They can be human resources practitioners, organizational development consultants, executives, vice presidents, managers, and so forth. Diversity practitioners identify systematic approaches, methods, and models that can be used to transform the organization into one that benefits from diversity. Effective diversity practitioners utilize multiple competencies. Wheeler (2001), through interviews with 71 diversity managers, has identified a list of competencies of diversity practitioners including: strong visionary leadership, business acumen, large systems change skills, results orientation, building and maintaining credibility in the organization, ability to influence, and commitment to diversity and inclusion. Wheeler (2001) believes that these competencies are important to the ability of the diversity practitioner to implement and maintain an effective diversity program. However, as indicated by the research listed above, an important factor in the success of diversity programs appears to be the ability to obtain the support and commitment of the senior management of the organization. Thus, an important competency of the diversity practitioner may also be his/her ability to create support of senior management for diversity management programs. Conclusion Gaining the benefits of cross cultural management can be difficult for many organizations. Many cultural diversity programs fail apparently because there is not enough support of diversity issues from top management. Leveraging diversity for the benefit of the organization requires a transformational change of the organization's culture because organizational barriers to diversity are often systemic, subtle, and deeply ingrained in the organization (Lyness, 2002). This is done through the implementation of diversity programs that are led by a diversity practitioner. Although having senior management's support does not guarantee that diversity programs will be successful, it is likely that without it diversity programs will fail. In short, without the support of senior management diversity practitioners will not be able to fully leverage diversity programs for the benefit of the organization. References Allen, R., & Montgomery, K. (2001). 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