Cross-ultural Management - Essay Example

?Cross Cultural Management Introduction Globalisation has greatly influenced the way companies run their business over the past decade. Companies have been increasing their presence in other countries all over the world. On the other side, domestic companies have had to contend with the foreign companies that have set up shop in their countries. The opportunities presented by globalisation are immense. The access to a global marketplace has been a big boost to companies’ efforts to expand their business empires. However, aside from the consumption side with access to more buyers, companies are also benefitting on the production side with regards to their capabilities to produce at lower costs. This has been made possible by their access to cheaper labor in the developing economies. This, however, presents companies with more challenges since these are people who, although like machineries are inputs for production, are much more difficult to handle. Hence, Mendenhall, Oddou and Stahl (2007) emphasizes the need to be able to handle the challenges presented by having a global workforce for managers in firms that operate globally. Companies must be able to face up to the challenges presented by the different culture of the different people that will be working with them. More so, the concept of having global operations in different countries will present HR practitioners with an array of culture and people necessitating the capability to be able to handle the different issues that will arise from such workforce diversity. This, however, is easier said than done for Hofstede (2001) warns that there are more chances for conflict than synergy when different cultures are mixed. Cross-cultural management therefore is very important since this is a pressing reality that companies wanting or are operating globally must face and succeed if they are to survive and thrive in the global business environment. Cultural Challenge According to Hofstede (2004), there are five cultural dimensions that HR practitioners and managers faced with cross cultural challenges can use to somehow understand the differences that are characteristic of their global workforce. One of the possible sources of conflicts that must be understood properly is the way people may view how power is distributed. Hofstede calls this the Power Distribution Index (PDI) whereby there is a bottom to top view of the inequality of the distribution of power. Hence, usually easterners identify strongly with their ethnic groups meaning they find power in their groups or by being collectively identified with each other while westerners are more individualistic. Thus, this shows that these people must be treated differently. Also, there are the poles of masculinity and femininity which reflects to a person being assertive or modest. Looking at a countrywide perspective, there is a significant difference among men towards women. Thus, companies operating globally ought to be sensitive to the inclination of their employees towards power as well as with the actuations associated with the poles of masculinity and femininity. The myriad of personalities that they will be handling can spell the difference between the success and failure of their global endeavor since these employees are central to their business successes. It would be unwise to hire cheap labor if the company cannot get them to work harmoniously raising the risk of attaining poorer quality and even defects on their products. When conflicts abound in an organization, the results are seldom fruitful. Also, there is the tendency to be risk averse or to be cautious and avoid uncertain situations. Hence, for cultures that have these tendencies, there are usually stricter laws and regulations in order for them to mitigate such risks and uncertainties. On the other side, there are cultures that are more lenient who are generally more relaxed and displays a high level of tolerance. Finally, there is the long term orientation (LTO) vis-a-vis short term orientation displaying the various tendencies of different cultures to be more prudent versus being focused on social obligations and traditions (Hofstede 2004). Moreover, Trompanaars and Hampden-Turner (2005) further underlines the need to be able to harness the force of multicultural environments by understanding that there are people that prefer their individualities more than the involvement in the group much like Hofstede’s power distribution index. There will be people that are achievers as well as the emotional ones that tend to be very sensitive. These varying tendencies show how much people from different countries can be different from each other. Also, the beliefs and values being held by the employees or would be employees can greatly impact the efforts of companies to motivate them and improve their morale which can ultimately impact their productivity. All these are influenced greatly by their cultures to which people tend to associate strongly to (Hall 1989). Global manpower Hodgetts, Luthans and Doh (2006) further underlines the need to calibrate the company’s strategy with the culture and behavior of their employees in order for them to fully harness the capabilities of the people that they will be employing globally. They have also stressed an understanding of the laws as well as the system of judiciary that governs the world. Thus, it has been shown that there are four pillars that have propped up the development of these systems that have greatly sculpted the cultures that impacts the behaviours of the different people from different countries worldwide. These are the Islamic Law which is prevalent in the Middle East where there are many Islamic countries, the Socialist Law that impacts communist countries such as China, the Common Law prevalent in the UK and her colonies and finally the Civil or Code Law which descended from the Roman Law prevalent in some areas in Latin America or parts of the US and in France. It is therefore easy to see that the differences in these laws that have governed the various countries have been rooted deeply within their people even before the dawn of globalisation. Thus, it is very important for HR practitioners to be able to understand the differences that are present in the manpower that they will be hiring. To be successful, the companies must be able to properly tune the strategy with the culture of the people in the country that they will be operating in. It is very important since the people in this country exhibits different behaviors emanating from the different customs and traditions that are different from those of the company’s home country. The strategic alignment of the culture is very crucial in order for the company to be able to harness their global manpower to have a more fruitful global endeavor. Therefore, the companies that are planning to operate globally must have the capability to handle the different challenges that will surely arise from the different cultures from which their employees will come from. Hence, there is the need for their human resources to be more strategic in order for them to be able to handle and succeed in these challenges (Redding and Stening 2003). Hence, the different employees as well as the different cultures will need different managerial styles. Therefore, in order to enable the proper utilization of the different manpower that will result from strategic alliances and global business endeavors, the management must be flexible enough to handle the pressure that may result from having a diverse manpower (Hickson and Pugh 2002). As mentioned, globalisation presents both opportunities and challenges. There is the chance to reach more markets as well the capability to enhance production capabilities and be able to bring down costs. Central to this endeavor is the manpower which, according to Kaplan and Norton (2005), is necessary for the improvement of processes that can improve market share which will ultimately redound to financial rewards for the company. Hence, it is important to be able to have substantial focus on the development of manpower. Does IT matter? Technology has also played a key role in the increasing trend of companies that are going global. Hence, technological companies have also increased their global presence and emerging powers are companies from Brazil that have recognized the strategic importance of going global. The country is among the BRIC economies which include Russia, India and China that have experienced phenomenal economic growth over the past years. Brazil is the leading Latin American country when it comes to exporting software and their exports have phenomenally increased by a hundred fold evidenced by figures from the 1990’s and early 2000 (Fischer, Milfont, & Gouveia 2011). Thus, Brazil has already set out to globalise their operations. This sector, although dependent on technological advances, is also very dependent on the competence of people to make and run these programs that are increasingly sophisticated. Another sector that has benefited from the technical boom to enhance their facilities and improve their services is the hotel and travel industries. Nowadays, these companies have made it easier and safer for tourists to travel and see the world. However, despite technological advances, these companies are still very dependent on the inherent care and courtesy of the human touch to their operations. On the other hand, these businesses are facing challenges in communications capabilities as well as culture from BRIC economies which has HR professionals scratching their heads as hiring becomes more challenging, developing these talents become more difficult and are not as easy to train as well (Laitamaki, Laitamaki, & Ruuska 2007). Hence, despite technological advances that has undeniably greatly helped companies globalise, the presence of competent manpower remains crucial to a company’s success. The problem with these Brazilian companies is that they are consistently being marred by problems with sourcing IT talents that will fit their global operations. Fortunately, for the meantime, there are enough talents in the country to fill their needs. However, the company’s effort to globalise has necessitated that they are able to handle the different cultures that they will be facing up with. With boom coming mostly from developing mostly Asian economies, it is important for companies to be able to handle the different culture that is prevalent in this part of the world. People in the Asian region are more reserved. These people associate strongly with their culture and the power distribution index of Hofstede seem to be skewed towards their ethnic belongingness. Therefore, the management style of these companies must encompass the different cultures that will be affected by their global expansion (Schneider and Barsoux 2002). This will assure them that their technological strengths will not be eroded by cultural misfits with their expansion and growth strategies. Clearly, the challenges point out the importance of having Human Resources that is strategic and proactive. Hence, Brazilian multinationals are faced with the problems of sourcing talented IT professionals that are able to fit into their culture. However, employees from different cultures cannot be forcibly fitted into an organization. A compromise has to come from both sides in order to be able to achieve the synergy that is quite elusive when the element of culture is brought into the global success equation. Indeed, having adequate control of the global human resources and using this resource to boost a company’s growth has been a strategic concern for most multinational companies. This has been a global concern and must be addressed by these Brazilian companies if they are to make their globalisation success last. Having the capability to manage a global workforce has been a critical element for sustainable global operations and therefore companies that have set out in this endeavor must be capable of hurdling the challenge of managing manpower internationally (Evans, Pucik & Bjorkman 2011) These Brazilian companies have tested the difference of centralization and autonomy to their different branches worldwide. However, IT manpower is highly technical and these people are not really easy to come by nowadays. Nor do they come cheap. Hence, the take off of these technological companies seem to have hit a snag wherein they remain rooted to their own home grown talents rather than take in variations in talents that can be sourced worldwide. This line of thinking must be changed if they are to ensure the sustainability of their global operations. Also, innovations are very important in technological companies in order for them to stay ahead. It would be detrimental to sit comfortably on their laurels because the possibility of a new company with better innovations can come along and make them obsolete. Thus, it is important for these companies to amass differentiated competencies worldwide. However, the culture issues remain very prevalent as this has contributed greatly since these Brazilian multinational IT companies prefer the comfort of their own culture (Muritiba, Campanario, & de Albuquerque 2010). For now, the situation is not yet critical since aside from India, Brazil has one of the highest number of qualified IT professionals assuring them of a fairly steady supply in the short term for their operations. However, as mentioned, in order to ensure the sustainability of their global presence, they must be able to capture the opportunities presented by having strategic alliances abroad. Hence, HR professionals must go beyond their internal customers and touch on the external customers so that they will have a better understanding of what these customers want and need. By doing so, these HR practitioners are able to bring into line their strategies to be able to act and think like the customers (Ulrich and Brockbank 2005). Moreover, it is also crucial for these companies, their managers and their HR to be able to marry the different cultures that they will be dealing with. That way, they can be assured of the productivity of their workforce which is very important for their international operations to go smoothly. This will enable them to reap the benefits from having operations abroad. The elusive synergy will then be captured and can then be used to improve their processes and their products (Usunier 2006). This can then help them to innovate so that the company can mitigate the risk of being caught flat-footed by more innovative companies. also, going back to Kaplan and Norton’s BSC (2005), the employees are very important in the Learning and Growth Perspective which is a leading indicator that the firm can use to gauge how prepared they are to handle the challenges that they will be facing as they carry on their strategies. Crossing the Cultural Abyss The challenges that have been presented with Brazilian IT and technological companies are all shared by all companies with global presence. One way or another, the differences in culture will impact different companies at different times and levels. There will be situations wherein there will be employees that can be hard to put up with or clients that are satisfied by different techniques and approaches. It is important to reiterate once more Hofstede’s (2001) point that cultural differences are more inclined to give problems than solutions. It is indeed easier to get conflicts rather than synergy from having a diverse culture of workforce and even customers rather than the coveted synergy needed to be able to harness the different strengths coming from this diversity. However, it is this synergy that can provide the company with the success that they are looking for when they set out to market and operate abroad. Getting markets as well as lowering costs are two of the very important opportunities presented by globalisation. Hence, it is very important to be able to manage the expectations and challenges that come along with this opportunity. Thus, in order to truly capitalize on these opportunities, companies operating internationally must be knowledgeable enough for them to be able to handle the rigidities of cross cultural management (Hampden-Turner 2002). Moreover, innovations are truly important in this era of technological affluence. Therefore, as mentioned in the Brazilian examples, innovation is very important in order to be able to keep a step ahead of competitors that can possibly take away their market share with innovations of their own. Thus, Early and Singh (2000) stresses the importance of innovation in the management of these diverse cultures. True, synergy can be very hard to come by with such workforce diversity. People, both employees and customers, can be spread through opposing poles. Therefore, it is important to be able to understand and calibrate strategies that can loop in people from cultures that may be sensitive or impartial while there are those that seek achievement as well as those that seek acknowledgement and credit in order to be able to truly succeed internationally. This can ensure that the companies can be able to get the force of cultural differences beneath them to propel them forward rather than be swamped by it making them go under (Trompanaars and Hampden-Turner 2005). Hence, it is important to be able to integrate the culture into the organizations of the companies. This is very important since this will play out importantly in order to be able to achieve the sustainable international business operations that are probably the main focus of firms that are operating internationally (French 2007). Indeed, cross-cultural management has been a central focus nowadays with the prevalence of companies operating abroad. The need to understand cultures more as well as to integrate the different behaviors of employees and customers around the world into the strategies of companies has been vital to the success and sustainability of these companies. therefore, companies have been calibrating their strategies in order to include the differences in the behavior of people that they work with and serve so that their international presence can be truly felt (Adler and Gundersen 2008). Furthermore, the need for the companies to develop cross cultural managerial capabilities has been key to the success of their international business endeavor. Moreover, this enables them to properly handle their people that may be sourced from both the western and eastern hemispheres. Again, despite the difficulty, it is in being able to forge this synergy that can truly bring about success in their operations (Adler and Gunderson 2008). More so, knowing the differences and understanding them using the dimensions brought forward by Hofstede (2001) can help the company to formulate their strategies and policies so that the practices in their home countries do not get mixed up with the cultural orientation of their employees and customers from the different countries that they will be operating in. References Adler, NJ & Gundersen, A 2008, International Dimensions of Organizational Behavior, 5th edn, South-Western, Mason, Ohio. Early, PC and Singh, H 2000, Innovations in International and Cross-Cultural Management, Sage Publications, Inc. 1 ed, June 13, 2000 Evans, P, Pucik, V & Bjorkman, I 2011, The Global Challenge: International Human Resource Management, 2nd edn, McGraw-Hill Irwin, New York. Fischer, R, Milfont, T, & Gouveia, V 2011, Does social context affect value structures? testing the within-country stability of value structures with a functional theory of values. Journal of Cross-Cultural Psychology, vol. 42, no. 2 , pp. 253-270 French, R., 2007, Cross-Cultural Management in Work Organizations, CIPD Publishing. Hall ET, 1989, Beyond Culture, Anchor Books. Hampden-Turner, C 2002, Building Cross Cultural Competence: How to Create Wealth from Conflicting Values, John Wiley. Hickson, DJ and Pugh, DS 2002, Management Worldwide: Distinctive Styles amid Globalisation, Penguin Publications. Hodgetts, R, Luthans, F & Doh, J 2006, International Management : Culture, Strategy and Behaviour, McGraw-Hill. Hofstede, G 2001, Cultures Consequences (2nd edn). Sage Publishing. Hofstede, G 2003, Cultures and Organisations, Profile Books. Kaplan R & Norton D 2005, Balanced scorecard: Measures that drive performance. 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Usunier JC, 2006, International & Cross-Cultural Management Research, Sage. Read More