Leader in Globalized Workplace: The Role of National Culture - Term Paper Example

Being a Leader in Globalised Workplace Has New Demands. Discuss Critically, How and Why National Culture Impacts on Many Different Individual Level Outcomes Introduction Globalisation is one of the most important factors affecting businesses, managers and employees in all parts of the planet. Globalisation has come to exemplify one of the strongest and salient sources of influence on leaders and employees. Throughout the past five years international goods and services movements have generated almost $8 trillion (Ulrich & Brockbank 2005). Globalisation reduces trade barriers among countries and results in the emergence of new trade zones and international trade agreements. It is no coincidence that globalisation enables organisations to compete for scarce resources and customer preferences internationally. Globalisation leads to and facilitates reduced labor costs, lower costs of manufacturing and marketing, and greater demand for products and services, especially from the third world countries (Bartlett & Ghoshal 1989; Harris & Morgan 1996). Apparently, leaders working in global organisations need new skills and knowledge to manage these organisations through the global change. Unfortunately, in light of the emerging globalisation trends the significance of national culture gradually wanes. The absence of geographical boundaries erases the existing cultural differences among employees. Yet, it is at least wrong to assume that globalisation eradicates the effects of national cultures on individual level outcomes; this being said, leaders in globalised workplace need a cultural intuition and understanding of the main cultural conventions affecting their followers. Globalisation and culture: Hofstede assumptions and their limitations in globalised workplace National culture has always been one of the central measures of effectiveness in organisations. With the advent of international organisational forms, national culture has come to exemplify an important source of influences on individual employee outcomes and one of the central objects of organisation analysis. Hosftede’s model of cultural influences on organisations has become the seminal element in the evolution of cultural knowledge in organisation research. Since then, “most of the research on culture has focused on identifying the core cultural values that differentiate cultures” (Erez & Gati 2004, p.584). Hofstede (1980) and Schwarz (1999) are rightly considered as the gurus in the analysis of cultural values and their implications for organisational and workplace behaviours. Hofstede’s study of national culture is one of the most frequently cited works in the research of national culture and its effects on organisational performance. In 1980 Hofstede published the results of a broad survey of almost 120,000 personnel from a large multinational company in the U.S., where he proposed a system of the national culture dimensions to measure and predict the relationship between culture and employee performance in the workplace (Hannerz 1992; Hofstede 1980). The central implication of Hofstede’s study is that national cultures as clusters of shared norms, values, and beliefs greatly affect and actually predict the way employees act in the workplace. In other words, depending on the cultural belonging of the employees, his (her) workplace behaviours and reactions can be modeled in advance. For example, individuals born and operating in masculine culture are prone to value competition, performance and success, whereas those born in “feminine” cultures are more likely to value caring, warm social relationships, and quality of life (Hofstede 1980; Leung 1989; Rohen & Shenkar 1986). The individualism-collectivism dimensions presented by Hofstede (1980) allow defining the degree to which employees are group- and socially-oriented (Chen, Chen & Meindl 1998; Smith, Dugan & Trompenaars 1996; Schwartz 1990; Triandis 1989). In this sense, national culture is believed to be one of the main predictors of employee reactions in various organisational situations and one of the major criteria of organisational and employee decision making in the workplace. However, the traditional models of national culture influences are not without limitations; and Hofstede’s dimensions are no exception to this rule. The limitations and controversies surrounding Hofstede’s model of cultural differences have been described in abundance. Basically, the discussed model was developed in the 1970s when globalisation was yet in its infancy (Chow, Kato & Shields 1994). Therefore, Hofstede could not envision the mergers and changes in national cultures and individual level outcomes that would happen under the pressure of globalisation. In fact cultures change dramatically when they come in contact with one another (Berry 1980; Berry, Poortinga, Segall & Dasen 1992). Moreover, no employee is entirely secured from the influences of acculturation (Berry 1980). The main drawback of the conventional culture-organisation models is in that they do not account for the dynamic nature of cultural development and assume all national cultures to be static. The emergence of new globalisation trends confirms the need to develop new models of culture and its effects on individual employees. Under the influence of globalisation organisations are becoming more flexible. Globalisation enables organisations to adapt to new changes and contacts between people from different cultures (Berry et al. 1992; Gupta & Govindarajan 2001; Jaeger 1983; Kostova & Roth 2002). As a result, it would be fair to assume that the relationship between globalisation and national cultures is multidimensional. The top-down influences on individual level outcomes originate in the macro-level of the global environment, which encompasses higher-level contextual factors like historical events, ecology, migration, cultural diffusion and technological advancement (Klein & Kozlowski 2000; Erez & Gati 2004; Mathieu et al. 2000). These factors have little individual validity but create a compound picture of the global reality in which organisations and individuals operate (Erez & Gati 2004). The process by which the global culture affects national, organisational and individual cultures is rather straightforward: globalisation first affects the external layer of national culture, which are slowly internalised by members of one cultural group/ unit and, with time, turn into basic values and assumptions (Black & Porter 1991; Earley 1994; Erez & Gati 2004; Gelhand, Nishii & Raver 2006). In the meantime, individual, organisational and national culture cause considerable effects on globalisation. The origins of these changes can be readily traced to individual behaviours, cognition, emotions and affect, etc. (Erez & Gati 2004). Individuals that work in teams influence each others’ behaviours and reactions, leading to the creation of new group norms that emerge to become a group property (Birnberg & Snodgrass 1988; Erez & Gati 2004; Morris & Peng 1994). The dynamic changes in individual and group relationships lead to the creation of more or less stable cultural conventions that differentiate individuals and groups from others (Erez & Gati 2004). With time, these changes and properties result in the development of new, broader contexts that eventually change the nature and content of globalisation. That globalisation makes organisations dynamic does not mean that the notion of national culture becomes obsolete. While certain elements of national cultures merge, other cultural differences become more pronounced. All these processes emphasise the importance of learning the effects of national culture on management and employee practices in globalised workplace. National culture and globalised workplace: The relationship still matters Understanding the effects of national culture on individual level outcomes is important for three reasons. First, nationality has far-reaching political implications for the quality of workplace relationships and employee performance (Hofstede 1983). Nationality is by itself a political notion deeply embedded into the cultural and historical traditions of nation-states (Hofstede 1983). Nationality is inseparable from the formal political institutions from which it originates; and nationality profoundly impacts the formal and informal ways, in which individuals access and use these institutions (Hofstede 1983; Ling & Jaw 2006; Nelson & Gopalan 2003). Many of these political pressures and conventions have proved stable over time and even in conditions of globalisation most individuals fail to change their perceptions of the political reality in which they operate. Second, nationality carries deep symbolic meanings for individuals, and an essential part of their identities is integrally linked to nationality (Hofstede 1983). In other words, individuals working in globalised workplace cannot give up their national belonging once and forever. Individuals continue judging each other by the nationality which they represent, and they are willing to act when they feel their national identity is under threat (Hofstede 1983). Finally, nationality has far-reaching psychological implications for understanding the processes affecting globalised workplace. On the one hand, nationality is responsible for the earliest cultural experiences in the lives of all humans (Hofstede 1983). On the other hand, understanding national culture is believed to be one of the main prerequisites for respecting and accepting this culture. All humans normally anticipate that their cultural values and beliefs will be respected by others, and when they share their beliefs and norms with other members of globalised workforce they are willing to see some of these values internalised. Needless to say, globalisation reinforces many of these influences and interactions, but national culture remains a distinct criterion of individual performance in the workplace. National culture as a cluster of norms and beliefs predicts the basic ways in which individuals act in globalised organisations. The reason for these differences is in that countries differ greatly in terms of their socio-cultural characteristics (Aycan et al. 2000; Daley & ). These common patterns of behaviours and beliefs further influence the decision-making and behavioural outcomes in globalised workplace (Schein 1992). For example, individuals belonging to cultures high in paternalism are less likely to engage in participative decision-making than their colleagues from the countries and cultures that score low on this dimension (Lam, Chen & Schaubroeck 2002). The dimensions of collectivism and individualism borrowed from Hofstede’s model of cultural differences predetermine the varying orientations of individual employees toward individual and group work in organisations (Smith, Dugan &Trompenaars 1996). These orientations are also influenced by the power distance between managers and employees (Smith, Dugan & Trompenaars 1996). National cultures produce heavy influences on employee perceptions of fairness and justice in the workplace: power distance was found to be of major importance in the relationship between perceived justice and job satisfaction among employees (Lam, Schaubroeck & Aryee 2002). National cultures also affect HRM practices in organisations, which raises the question of their compatibility and convergence in globalised workplace. For example, elements of motivation and employee compensation vary across countries and national cultures (Friedman 2007). Depending on the basic dimensions of each national culture, HR professionals and leaders will view their roles differently. In countries high in uncertainty avoidance new administrative procedures and assurances have to be communicated to create a greater sense of comfort in individual employees, whereas career development may give place to stability and even static culture, as individual employees in high uncertainty avoidance cultures experience anxiety about assuming new responsibilities and roles (Friedman 2007). However, again, under the influence of globalisation national and organisational cultures gradually merge. New contacts and relationships give rise to new values, norms, and cultural beliefs. Earlier beliefs about national cultures and their effects on individual level outcomes give place to new perceptions. Consequentially, it is at least wrong to treat national cultures as static sets of unchangeable conventions. Globalisation challenges previous beliefs about culture as a static dimension of workplace performance. The concept of culture is by itself extremely elusive, and globalisation makes it even more contradictory (Baskerville 2003). Cultures cannot be divided into component systems similar to those proposed by Hofstede (Kuper 1999); nor can it be interpreted in the language of numbers and indices. In globalised workplace cultures are becoming extremely flexible and the boundaries between national beliefs and traditions slowly disappear. Moreover, differences in national cultures explain only a tiny portion of variances in individual behaviors and workplace outcomes (Gerhart 2008). In reality, the mean differences in individual level outcomes across countries are much smaller than those within these countries (Gerhart 2008). National cultures may put constraints on organisational cultures, but their effects are much less significant than has been previously assumed (Johns 2006). In this situation, leaders in globalised workplace face a double challenge: on the one hand, they must realise and recognise the differences among numerous national cultures; on the other hand, they must be realistic in their estimation of the regional and national cultural differences and their effects on individual level outcomes. Most probably, the best leaders can do to ensure the efficiency of globalised workplace processes is to approach every employee and organisation individually and constantly monitor the trends and changes in national cultures. It is also imperative that leaders monitor the patterns of cultural interactions within organisations and reduce the risks of cultural conflicts and their negative influences on individual level outcomes. Being a leader in globalised workplace: What to do with culture? Many leaders entering globalised business environments find themselves extremely ineffective in dealing with the main cultural and organisational issues. The most frequent cause of leadership ineffectiveness in globalised workplace is the lack of exposure to individual and collective issues that span the national boundaries (Pucik 1996). Most leaders, be they European or Asian, have their skills and models developed within their own native countries and, for this reason, fail to envision the organisational and cultural issues emerging in the global business world. Another problem is that most global organisations decentralise their leadership and management operations; consequentially, individual employees and leaders working in these local divisions lack the ‘global’ view of the organisational reality (Pucik 1996). Eventually, most global organisations choose expatriates to be members of their workforce rather than emphasise the importance of creating the global workforce (Pucik 1996). Leaders in these organisations cannot adopt the global view of organisational culture and do not see the relationship between national cultures and individual level outcomes. Networking and continuous learning are the two most important predictors of leaders’ success in globalised workplace. New technologies have altered the nature of workplace relations, and technological advancement enables organisations to become networked (Markovic 2008). According to Mankin and Cohen (2004), networking implies that “organisations now have to go further to find the right pieces and rapidly pull them together to create the best fitting their purposes. When circumstances change, they also have to be able to take these collaborations apart just as rapidly and start over with different pieces” (p.163). Networking allows choosing and sustaining the best combination of national culture pieces that reflect the global cultural priorities and enhance the organisation-global culture fit. Leaders in globalised workplace must be able to deal with the complexities of multicultural environments and communicate their goals in ways that connect all nations and nationalities into a coherent workforce (Markovic 2008). This is possible if leaders expose themselves to different cultures and continuously learn from them (Jokinen 2005; Markovic 2008). It is within the leader’s scope of responsibilities to teach the followers the value of multiculturalism and diversity and expand the scope of experiences gained by individual employees while interacting with the representatives of other cultures. Conclusion Globalisation affects all aspects of organisations’ performance. Traditional models emphasise the differences in national cultures and their implications for individual levels outcomes. Unfortunately, these models treat national cultures as predominantly static, whereas globalisation enables flexibility and adaptability across all organisational forms. 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