Cross-Cultural Management of Dancom Company - Case Study Example

Cross-Cultural Management in a Particular Case Study In this age of globalization, there is much controversy on the coming together of all kinds of people for a common purpose. In an environment with people from different cultures work together, one needs to understand the culture where another comes from if harmony is to be achieved. Culture is defined as “the collective programming of the mind which distinguished the members of one human group from another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture” (Hofstede, 1994). From this definition, one can perceive how much influence culture has on people. This is markedly felt in an international environment. If people are considerate and understanding other cultures, and makes the necessary adjustments to accommodate the needs of others, then they can earn the cooperation of others. On the other hand, if they insist on promoting their own culture and their value system, whether it agrees with others or not, then it can be surmised that sooner or later, the personal relationship will encounter major conflicts. This analysis is logical and general, but it goes without saying that there is more than meets the eye. In the case of Dancom, a multinational company which has set a fort in Russia, employing Danish as well as local Russian workers, many issues have come to surface. Apart from two distinct cultures trying to co-exist in one company, there are even factions that have formed in the Russian subgroup, that of the Hosting insiders and the Hosting outsiders. The insiders are characterized by a deeper identification with their foreign employers, and generally find the organization at Dancom friendly. They take pride in being part of the company. On the other hand, the outsiders find indifference in the company and refuse to fully accept the foreign culture of the company. They admit that they are more externally motivated by their jobs at Dancom. However, for both Russian subgroups, they agree in their attitude towards the formality of the Danes and the inefficiency of the headquarters in Denmark. These Russians perceive inefficiency of Headquarters as “a huge, clumsy monster”, “inflexible structure” and “slow conservative machine”. This reputation came about due to the lack of communication between the headquarters and their subsidiary in Russia. Both sides have valid reasons for their issues. The Russians view delays in responses and requests as a lack of respect for them, while the Danish headquarters refrain from meddling in the responsibilities of local managers in their subsidiaries as well as being cautious not to give their all to a subsidiary that may not be stable in the long run. The case study clearly shows how different Russians and Danes are in terms of many qualities that are influenced by their respective cultures. Generally, Russians are less formal, and prefer relationships with colleagues to be so too. They are not regimented in their planning and decision-making skills and pursue goals right away. Danes are more deliberate in their thinking and do not mind spending time bouncing ideas back and forth before coming up with a final decision. From this difference alone, conflicts and ill feelings may ensue if both parties are not enlightened as to the background of the other is and understand where they are coming from. The present cultural qualities of people may stem from the history they shared as a nation. In terms of planning, the Danish interpret it as a long term activity. Time invested on it is not regretted since the planning products are used as a management tool which is instrumental in evaluating work progress. On the other hand, Russians do not like to spend much time in planning, seeing it as a waste of time instead of diving into action. They do believe it is important in the short term level. There are some issues that can be planned a maximum of one year ahead such as concerns related to big stable customers, otherwise, they believe long term planning is fruitless since everything in Russia changes so quickly. When it comes to decision-making, both cultures are poles apart. The Danes arrive at a decision after much deliberation to ensure that the final decision will work for the benefit of the majority. They do value a collective decision, and gather their strength from teamwork. Group discussions, coordination of actions and the need to reach a consensus from the giving and receiving of feedback is considered a crucial process in decision making. The Russians, on the other hand, perceive the collective mode of decision making that entails long discussions aimed at reaching a consensus, as a slow, non-flexible and inefficient way of arriving at a final decision. They value speed and flexibility more and believe in being more results-oriented than being process-oriented. Thus, individualized thinking and decision making is viewed as a faster way to reach the necessary goals. Hofstede and Peterson assert that “collectivism implies a link between the individual’s self-identity and a collective, whereas individualism implies that the two are more fully distinct” (2000, p.408). It must be noted, however, that the individualist sees the distinction between self and other as the defining characteristic of social interaction, whereas the collectivist sees the distinction between in-group and out-group as paramount in social interaction. This results in the notion that collectivists do not believe that social interaction is fundamentally universal in nature; there is always a self (in-group in the collectivist’s case) and an other (out-group) that allow an individual in any type of society to identify more closely with some. A lot has to do with the personality and cultural upbringing of the conflicting parties. Strong personalities usually dominate and crush the conflict into oblivion by claiming their stake. More cooperative parties integrate their ideas and compromise for a “win-win” solution to the problem. Some subservient ones just oblige in spite of their own opinion to avoid conflict. For the Danes and Russians, these considerations have to be taken up in order to understand sources of conflict. Having established that conflicts are bound to surface in highly diverse environments, how can these be mediated, if not prevented? It is vital that the source of conflict is examined. Personal backgrounds need to be studied to be able to understand where the conflict is coming from and to predict future behavior. Explaining differences in a non-threatening manner may just be the key, if conflicting parties are mature individuals. In more complicated situations, Dr. Gillian P.S. Khoo identifies five types of handling conflicts, namely Dominating, Compromising, Integrating, Avoiding, and Obliging conflict styles. Research further shows that “European Americans have been found to dominate conflict situations while Asians and Asian Americans tend to either avoid conflict or to oblige the other party. A high degree of individualism has been attributed to the use of a confrontational- oriented style among Euro Americans, while greater collectivism and a desire to avoid loss of face have been attributed to the use of more passive and accommodating conflict styles among Asians and Asian Americans.” (Khoo, 1994). Most conflicts that surface in intercultural settings are caused by miscommunication and misunderstanding. Ethical considerations are subject to interpretation. “The reason there are cultural differences is because there are differences in how the situation is understood. Almost everyone agrees that ‘ethics’ is doing the ‘right thing’ but how to reach an ‘ethical’ decision is open to debate.” (Brisbane Institute, 2005). Coming up with a final business decision depends on situational factors such as organizational goals, organizational codes of ethics, the legal environment and the perception of the other party. National culture influences these factors. Organizational goals may be set but people from different cultures may have different approaches in reaching them. It is essential that no matter who they are, employees’ values must be aligned to the company’s. Differing values create conflict and will impede goal achievement. According to Mishra and Morrissey (1990), the following factors propagate trust: open communication; giving workers a greater share in decision making; sharing of critical information and true sharing of perceptions and feelings. This is consistent with the views of Eisenhardt (1989, 1990) who concludes that companies should reflect on three things when analyzing a group’s perception in planning and decision-making: the sharing of information, their current orientation in the company and take on the issues concerned, and their intuition. Russians treat information as a source of power, status and authority rather than as a basis for making decisions, as viewed by the Danes. Danes see efficiency, predictability, professionalism and modernity as key forces for rationality while Russians believe in fate and destiny and tend to make decisions on the basis of intuition. They have a strong need to be asked for advice in the process of decision making at a more operational level, if not, then they see that as a lack of respect for their opinions. However, in the case study, if Danish managers try to involve Russian employees early in the decision-making process, then they are viewed as their Russian counterparts as confused, soft and lacking in ability, hence the need to seek their opinions. Such a situation may be a source of constant walking on eggshells. Management must be consistent in communicating to each worker its philosophy, mission and vision. Each worker should be able to feel that he is part of a great team that sets high goals and successfully attains them. “Creating the conditions that engender knowledge transfer entails significant structural and cultural changes by top leadership, which will require leaders to be convinced that the benefits of knowledge transfer outweigh the costs. In the absence of this commitment, it is unlikely that attempts to increase knowledge flow will succeed (Burgess, 2005). The current trend of the embracing of diversity has given birth to the concept of “the inclusive workplace”. Mor Barak (2000) defines it as one that: “values and uses individual and intergroup differences within its work force; cooperates with and contributes to its surrounding community; alleviates the needs of disadvantaged groups in its wider environment; and collaborates with individuals, groups, and organizations across national and cultural boundaries” (pp. 339-340). Creating an inclusive environment involves organisation culture and culture change (Young, 2007). It takes re-evaluation of long-held beliefs and practices to accommodate such change. For instance, power distance may intimidate some minority groups from being participatory in the organisation. In a typical hierarchal organisation, the dominant groups control the resources and hold the power to set rules. Organizational change shortens the power distance form the top to the bottom of the pyramid (Young, 2007). Another cause of disharmony in the highly diverse setting is uncertainty avoidance. Uncertainty avoidance describes the reaction of a group to that which is different or unfamiliar (Hofstede and Peterson, 2000). Typically, those cultures that are allowed more freedom to define themselves as individuals experience a lower level of uncertainty avoidance, whereas cultures that stress conformity tend to experience higher levels of uncertainty avoidance. Culture and group formation themselves are the result of a desire to reduce uncertainty, as membership in a particular group defines value systems and provides a framework for behavior. Part of effective communication within a diverse organisation is the sharing of knowledge and ideas that will ultimately redound to the benefit of the organisation. However, there is usually a breakdown in the transfer. “Motivational barriers to knowledge transfer included a lack of extrinsic rewards, stronger levels of group versus organizational identification, reciprocity norms, and the view of knowledge as a means of achieving upward organizational mobility.” (Burgess, 2005). Workers will be more encouraged to transfer knowledge to another member however different that individual is if this sort of behaviour is rewarded by management either by external means such as merit or salary increases or internal means to boost their self-esteem such as praise or simply appreciation. In the case study at hand, managing cross-cultural work environments entails much investment on the part of the managers. Having considered all factors related to cultural backgrounds and differences, it is suggested that one needs to be aware of the local employees - whose profiles suit the hosting insider and whose suit the hosting outsider? Next, among these locals, select and appoint members with English language capabilities to help the foreign counterparts learn the Russian language. This willingness to learn the local language will be seen as a sign of respect for the Russian colleagues and their culture. Another recommendation is to pay attention to how headquarters in Denmark handles the communication flow with the Russian subsidiary and rectify any erroneous practices to preserve harmony of communication and relationships between cultures. Still another recommendation is when making decisions, be more open to apply top-down oriented techniques. The Danes need to adjust to the host country’s known systems in management, and in terms of decision making, the Russians respect decisions coming from top management even if they are left out in the process of arriving at the final decision. Finally, since Russians are not in too deep on long term planning, Danish managers should be ale to formulate short term oriented tasks with achievable and observable results when introducing strategic plans. Everyone wants to have a piece of the world. That is what globalization aims for. In the process, people from different lands come together in an attempt to unite their best interests. If this Herculean task is achieved, the promise of a better world for our children awaits. References Brisbane Institute, Business Ethics, 2005 Burgess, D. (2005) What motivates employees to transfer knowledge outside their work unit?. The Journal of Business Communication. Volume: 42. Issue: 4 Eisenhardt (1989, 1990) Hofstede, G.(1994) Cultures and Organizations: Intercultural cooperation and it’s importance for survival –software of the mind, London: McGraw- Hill/HarperCollins Hofstede, G. and Peterson, M. (2000) ‘National Values and Organizational Practices’, in N. Ashkanasy et al (Eds.), Handbook of Organizational Culture, Thousand Oaks, CA: Sage, 401-415 Khoo, G P. (1994), "The role of assumptions in intercultural research and consulting: Examining the interplay of culture and conflict at work". Paper presented at Pacific region forum on business and management communication, David See-Lam Centre for International Communication, Canada, November, 1994 Mishra, J., & Morrissey, M. A. (1990). Trust in employee/employer relationships: A survey of West Michigan managers. Public Personnel Management, Vol. 19, No. 4, winter 1990, pp.443-463. Mor Barak, M. E. (2000) “The Inclusive Workplace: An Ecosystems Approach to Diversity Management”, Social Work, Vol. 45, No. 4 Young, C. (2007) “Organization Culture Change: The Bottom Line of Diversity” The Diversity Factor, Winter 2007/ The Changing Currency of Diversity Volume 15, Number 1 Read More