Globalization of Cross-Cultural Management - Essay Example

?Part A Globalization is a phenomenon that no business organization affords to ignore. The improvements in technology have in a way speeded up theprocess of globalization. However, the expansion of world markets by rapid globalization also means increased competition. The improvement s in technology have allowed the business organizations to coordinate their business activities with the rest of the world by using facilities such as e-mail, phone, fax and video conferencing. However, different cultures tend to have different ways of conducting business and communication. Communication problems arising owing to cultural diversity can damage the team relationships in a business organization. In the case study under consideration, the French company Lemma is facing such problems owing to the differences between its organizational culture and the cultural makeup of the Anglo-Saxon companies it has acquired. There exist distinct differences between the French and Anglo-Saxon cultural values. The organizational culture at Lemma had its basis in the French cultural and social values, which made it difficult for the company to face the global integration – local adaptation dilemma. As per the Hofstede cultural dimensions, France has a high Power Difference Index. This means that the French managers tend to be autocratic in their approach towards administration and business. They prefer a hierarchical form of organization, where the senior administrators and managers do retain a certain distance from their subordinates. The French tend to prefer a centralized form of administration and expect their subordinates to obediently endorse the decisions taken by them. French are collectivist in their business and social interactions. The teams tend to be closely integrated in their approach and composition and there exist strong bonds between the colleagues in an organization that are to a great extent determined by status and hierarchy. The managers tend to support and protect their subordinates in exchange for unquestioning loyalty. The companies operate like a large family that is usually hierarchical in its constitution. The French culture is an essentially feminine culture. Personal relationships and bonds stand above anything else. Team members prefer to be modest and caring in their approach and preference is given to arriving at mutually acceptable decisions through consensus, rather than through direct confrontation. France has a high Uncertainty Avoidance Index, meaning that the French managers have a high intolerance for uncertainty and ambiguity and are uncomfortable with contrary opinions and ideas. Hall facilitates another set of cultural dimensions, which offer more insight into the French cultural values. According to Hall, the French culture is a High Context Culture. Much is taken for granted and people believe in instinctive and contextual understanding rather than resorting to detailed explanation. There exists a strong distinction between in-group and out-group. The bonds between team members are very strong and interpersonal relationships play a crucial role in career development. There is high preference for long term relationships and people are very flexible with time. These premises are supported by the theory of Dutch scholar Trompenaars, as per whom the French culture is affiliated to particularism with highly collectivist tendencies. The French tend to be specific in their approach to relationships, depending too much on custom and protocol. It is an ascription culture, where status is governed more by traditional norms and less by individual achievement. In that context, the term ‘Anglo-Saxon’ primarily refers to the cultural values and norms of the Lemma’s non-French employees, who are primarily North Americans. The cultural values of these employees are in sharp contrast to Lemma’s specifically French values. The ‘Anglo-Saxon’ cultural values lean in the favour of a low Power Distance Index in the sense that Lemma’s Anglo-Saxon employees and managers are not accepting of an autocratic and regimented form of management. They are open to challenging and criticising the ideas and views of their superiors. The Anglo-Saxon employees are very individualistic in their approach towards business and do not place high value on interpersonal bonds and grouping. The works of Hall further elaborate how Anglo-Saxon values differ from the French values. The Anglo-Saxon values are predominantly Low-Context in their approach. The Anglo-Saxons accept a more open and explicit form of communication and give less credence to covert or implicit communication. Their grouping patterns are determined by work priorities and requirements and are less open to intimacy and cohesion. Not much priority is given to group loyalty and bonding. It is a system in which the task commands greater importance over relationships. The Anglo-Saxon values are accepting of a Monochronic Time frame where preference is given to ‘getting things done’ than engaging in human interaction. The Anglo-Saxon culture is an achievement culture where the employees are expected to prove themselves to achieve status rather than relying on personal connections and relations. It is more open to Universalism where preference is given to formal and rule based ways of doing things and accessing efficiency. It opts for a diffused approach towards relationships, where grouping is decided by context and practical requirements, rather than by traditional loyalties. With the acquisition of Anglo-Saxon multinationals, Lemma decided in the favour of Anglo-Saxonization of its management approach. A direct outcome of this approach was the extension of greater representation to the Anglo-Saxon managers in the top management, who as per their values were more result-oriented and performance-oriented. Any cultural change in an organization is to a great extent dependent on the composition of the top management. In that context, a greater representation to the Anglo-Saxon managers was a right step towards internationalization of Lemma. It was owing to this approach that the organizational procedures at Lemma became more formalized, transparent and fact based. It would have been next to impossible to inculcate Anglo-Saxon values in Lemma without changing the composition of the top management. Part B 2. In any organization, HRM stands to be an important strategic function that is primarily associated with recruitment, training, career development, and communication and performance appraisal. HRM policies of any organization have a direct impact on the varied aspects of that organization. The choice of a specific type of HRM policy by an organization is to a great extent dependant on whether that organization tends to benefit more from standardization of management approaches and procedures or does it need to adapt to the emerging realities and change. The management of human resources at international level is always more complicated and difficult because of varied differences existing between subsidiaries and headquarters. Staffing constitutes an integral aspect of HRM. Companies pursuing an ethnocentric approach to HRM tend to allocate top management posts to individuals from the home country to assure that the native practices get adopted by the subsidiaries. In contrast, companies open to a geocentric approach to HRM select and recruit managers on the basis of their achievements and proficiency, irrespective of their nationality so that the best management practices get replicated in varied units of the organization. Lemma’s shift from an ethnocentric to a geocentric approach to HRM needs to be analyzed in the light of the above mentioned facts. To begin with Lemma was an organization that had a major proportion of its business centred in France. Thus the continuation of an ethnocentric approach towards organization and the resultant standardization of the organizational procedures were in favour of the organization. It made management less complex and assured certainty and control. However, the new growth by acquisition strategy of Lemma in the last couple of years added many new nations to its operating base, leading to the inculcation of new employees who were not affiliated to the French values and culture. While the French employees comprised only 19 percent of the Lemma’s work force, yet 45 percent of its top management posts were occupied by the French. Reasonably speaking, the organizational culture having its origins in the French values and culture was simply not in consonance with the cultural mindset of 81 percent of Lemma’s employees. So by necessity, Lemma had to shift to a geocentric approach to HRM. The outcome of this shift was that Lemma started giving representation to the Anglo-Saxon nationals in its top management, thereby giving them the chance to inculcate and alter the organizational culture. Consequently the company became more performance oriented in its approach to recognize the ascription culture of its Anglo-Saxon managers. 3. The organizational culture plays a major role in any change process initiated by any organization. So to initiate a process of introducing context fitted reforms in any organization, it is a must to understand the overall fabric of the culture of an organization. Yet, the astonishing fact is that the organizational culture never exists in isolation or vacuum. It always has links in the regional or national culture of the country in which an organization is located. The cultural values of the home country do always have a predominant effect on the culture of any organization. In that context varied experts like Laurent and Hofstede hold that there is a strong link between national culture and organizational culture. It would not be wrong to say that the French national culture had a strong impact on Lemma’s organizational culture. There is a strong correlation between the findings of the intercultural management experts like Hofstede, Hall and Trompenaars pertaining to the French culture and the management practices of the Lemma’s managers in the case study under consideration. As per Hofstede, the French culture has a high Power Distance Index. Consequently the French managers at Lemma preferred an autocratic and hierarchical approach towards management, where the leaders maintained some distance from the subordinates. Also the top managers expected their juniors to defer to their policies without questioning them. The managers at Lemma preferred a close knit approach towards administration, where loyalties mattered more than anything else. The culture at Lemma was an essentially feminine culture, with stress being laid on modesty and concern for others. The findings of Hall further support this premise. Organizational culture at Lemma was a typical High-Context Culture where managers relied more on implicit and covert communication and modes of sharing information. There existed a strong sense of family in the organization with much stress being given on in-group and out-group distinctions. Hence, the managers were not openly accepting towards managers having non-French nationalities. The performance and appraisal procedures at Lemma were informal rather than being formalized and standardized, with promotions to higher levels largely depending on interpersonal contacts and relationships. Lemma’s culture in consonance with the French culture was more favourable towards particularism, where relationships were considered more important than rules. Thus, it goes without saying that there always exist strong links between national culture and organizational culture. 4. Lemma was a company that was traditionally dominated by the French managers. Most of its business was centred in France and whatever foreign subsidiaries it had, the company preferred to place the French expatriates as managers there. The consequent outcome was that the organizational culture at Lemma was essentially French in its origins and values, being High Context and feminine. The company had a highly centralized and hierarchical management framework, where the stress was placed on loyalty, allegiance, relationships and family feeling. Simply speaking it was an all French work environment where the expatriates felt at home. There existed very little differences between the policies and priorities of the headquarters and subsidiaries. The expatriates felt at Lemma as a fish feels in water. However, in the late 90s and early 2000s, Lemma pursued a policy of growth by acquisition which brought some major Anglo-Saxon multinationals to its portfolio. The proportion of Anglo-Saxon employees in the North American subsidiaries of Lemma increased, which failed to justify the domination of expatriates in the top management. There existed major differences between the cultural dimensions of the expatriates and the Anglo-Saxon staff working at subsidiaries, negatively impacting cohesion and teamwork. The Anglo-Saxon managers felt sidelined and ignored. Thus Lemma shifted it HRM approach from being ethnocentric to geocentric, by giving representation to the Anglo-Saxon managers in the top management and by formalizing and standardizing the appraisal mechanisms, as per their aspirations. This diluted the hold of expatriates on Lemma and made way for a culture shift in the organization. 5. There is no denying the fact that Lemma is on the road to internationalization of its HRM policies and has taken varied organizational, recruitment and managerial steps to dilute the influence and domination of French culture in the organization, at least in the subsidiaries. However, Lemma’s decision to retain French as its official corporate language is totally not in consonance with its geocentric HRM intentions and may hold back the organization’s initiatives to acquire a truly global identity and presence. Language in its most fundamental aspect is the verbal expression of a culture. A culture includes within its domain the essential values, beliefs and ideas of a nation that are usually expressed through a distinct language. A language over ages imbibes within itself all the things that a race could think about and all the ways it can think. For instance in Latin language there is no word for the male friend of an unmarried woman because the Roman way of thinking did not allow for equal relationships between men and women. In that context the usage of French as the official corporate language at Lemma in a way allows for the domination of French cultural values and way of thinking at Lemma. Besides, the Anglos-Saxon employees not knowing French my feel inhibited in their ability to communicate effectively in the organization and may also feel left out. The exclusivity of French language may also inhibit the French managers from openly communicating with the Anglo-Saxon managers. This does not allow for the free flow of values and ideas within Lemma at both a horizontal and cultural level. Besides, this also involves financial costs in terms of money spent on translation and transcription. In such a scenario the best approach for Lemma would be to shift to language that is more ubiquitous amongst its employee base. It may be English. 6. Lemma had an organizational culture that was rooted in the French values and way of life. The French culture has a High Power Distance Index. To put it simply, the French are comfortable with the unequal distribution of power within the organizations. As a result Lemma has a highly centralized and autocratic managerial approach in which the subordinates show distinct deference towards their bosses. However, the Anglo-Saxon managers working for Lemma come from cultures that have a low Power Distance Index. Thus, they are comfortable in a more equality based work environment where they can freely discuss and question the views and ideas of their superiors. In consonance with the French way of life, the French managers at Lemma believe in a collectivist culture where more importance is given to the group aspirations and relationships. In contrast, the Anglo-Saxon managers come from individualistic cultures where individual ambition and identity are encouraged. Lemma has an essentially feminine culture that puts caring for others and modesty above competition and target achievement, while the Anglo-Saxon managers believe in a masculine approach towards things that calls for competitiveness and assertiveness. The French have a High Context culture that does not believes in detailed and elaborate explanations of ideas and details and much is left to implicit understanding. In such a scenario the Anglo-Saxon managers who are from a Low Context culture may feel confused and constrained as they are more open to explicit communication and detailed explanations. The French managers at Lemma favour Particularism, where relationships are more important than formal rules and regulations in all the aspects of an organization that includes recruitment and promotion to higher levels. This may seem totally intolerable and unjust to the Anglo-Saxon manager who being from a Universal and ascription culture believe in formal rules and regulations and aspire to rise through personal achievement and performance. So Lemma needs to recognize that geocentric management not simply about recruiting people with different profiles, but also involves changing the overall organizational culture with its deeply embedded values and ways of thinking and working. Until Lemma does not take care of this aspect of its geocentric HRM approach, the goal of effective management of diversity within the company is far from over. 7. Employee motivation is one of the most important challenges before any organization. In any Multinational corporation like Lemma, the projects teams usually comprise of team members that have diverse cultural backgrounds, aspirations and individual objectives. In such a geocentric environment motivating the employees essentially involves ushering in an organizational environment that helps the employees achieve the project requirements while extending maximum satisfaction in terms of what people value most. However, the thing that needs to be understood is that though the employees belonging to diverse cultural environment aspire for more or less similar things like job satisfaction, a sense of accomplishment, recognition, etc., they may prefer different approaches and ways to achieve them. According to Maslow’s Hierarchy of Needs Theory, once the physiological and safety needs of an individual get satisfied, one graduates to social needs that includes the need for belongingness and love. In that context it is reasonable to assume that an individual feels more satisfied and motivated in a work environment that give space to one’s unique cultural values and ideas and allow one to perform and succeed as per those cultural values. As per Alderfer’s Frustration-Regression theory of human needs, if an individual is denied satisfaction pertaining to a higher order need, then that individual aspires to increase satisfaction in some lower order need. For example failure in social interaction may motivate an individual to aspire for more money or power. This again supports the premise that individuals attain more job satisfaction in a culturally compatible work environment. According to Expectancy Theory propounded by Victor Vroom in 1964, individual accesses the outcomes associated with various levels of performance and select a level that generates maximum reward. Hence, Lemma has done right in formalizing and standardizing its appraisal procedures as they will allow the Anglo-Saxon managers achieve job satisfaction by allowing for a recognition of their contribution, that would not have been possible in an environment given to particularism and collectivism. Read More