Cultural Diversity in the International Business Environment - Coursework Example

Managing Across Cultures Table of Contents Introduction ……………………………………………………………………………………3 Theories on Cultural Dimensions……………………………………………………………….4 American and Chinese Cultural Differences…………………………………………………… 7 Role of Cross Cultural Training…………………………………………………………………10 Conclusion……………………………………………………………………………………….13 Introduction The international business environment has been constantly pressuring workforce members to demonstrate high levels of professional expertise as well as recognition of cultural diversity (Matveev and Nelson 2004). Organizations that rely on working teams, which integrate culturally diverse members, have been increasing, thus the need to establish intercultural relationships and respond to the needs and expectations of every culture. Diversity in workforce members can lead to improved organizational performance and effectiveness (Pires, Stanton, and Ostenfeld 2006). Therefore, in order to function better with diverse colleagues, there is a crucial need for multicultural employees to be aware of the cultures that they are working with as well as have an appreciation for their values and beliefs, attitudes toward conflict, and personal experiences (Soderberg and Holden 2002). The increased reliance of international companies on a culturally diverse workforce should drive these organizations to improve their members’ understanding of how certain processes such as training or communication can positively contribute to the success of a multicultural labor force. Although ethnically diverse teams play a critical role in the success of companies due to the flexibility, receptiveness, and resource utilization that are expected of them (Marquardt and Horvath 2001), the management of cultural differences and conflict has become a challenge for many international organization. Diversity in culture can bring about misunderstanding, adverse relationships, and weak performance, thus the need to effectively manage geographic distances, facilitate control and coordination matters, establish strong communication, and maintain team consistency. Because of this crucial need, numerous studies, even early research such as that of Hofstede and Trompenaars, have been carried out to explain cultural variations in the working environment and the successful management of these differences among employees. Theories on Cultural Dimensions Through my experience as international director, I have learned about the essential components behind a successful expatriate assignment. Theories of cultural dimensions from well-known researchers such as Hofstede (1980) have been of good use in explaining why people are culturally different from each other. National culture plays a crucial part in understanding a workforce that is ethnically diverse as explained through Hofstede’s (1980) cultural dimensions including power distance, individualism, masculinity, uncertainty avoidance, and long term orientation. Power distance indicates the acceptance and expectation of the society, especially the less powerful individuals, that power can be unequally distributed, thus representing inequality. Anyone who has had experience in international studies can point out that all countries and societies have demonstrated inequality in wealth and power distribution, although some are more unjust than the others. Individualism refers to how people are integrated into groups; for instance, individualist societies tend to establish loose relationships among its members and each individual is expected to attend to himself and his family while collectivist ones are likely to stay committed to such relations and demonstrate unwavering loyalty to each other. Masculinity indicates how gender roles are distributed; men’s values significantly differ from those of the women such as in terms of assertiveness, competitiveness, compassion, and modesty. The index for uncertainty avoidance suggests how societies can tolerate and accept ambiguity, or whether or not they can find comfort in uncertain and unplanned situations. Unstructured circumstances are often different from the normal conditions and cultures that aim to avoid uncertainty place their efforts in minimizing the likelihood of ambiguous situations through the implementation of strict rules and regulations to ensure control over all. On the other hand, cultures that are accepting of uncertainty are more open to change and new ideas, are less emotional and more undemonstrative, and carry out as few policies as possible. Finally, long-term orientation is said to be associated with values; for example long term orientation has been linked to certain values such as thrift and determination while short term orientation has been attributed to having respect for one’s traditions and accomplishment of social obligations. The application of Hofstede’s (1980) cultural dimensions on the understanding of employees has served as a useful guide. It has given both high and low level workers with an idea of what they should be expecting from their colleagues and supervisors; moreover, it has also provided help in expatriate assignments as these dimensions can help expatriate workers gain knowledge about cultural differences prior to being assigned with tasks that require cultural awareness. However, I do not believe that this is appropriate for making conclusions about a certain country, culture, or society in general as not all individuals can fit into such assumptions. The data may not also be up-to-date as a culture of a country may gradually change over time, whether it is influenced by internal or external factors. Meanwhile, Trompenaars (1993) came up with their own set of cultural dimensions somewhat similar to those of Hofstede (1980) although some of these provide a different perspective. These included (1) universalism versus particularism which referred to the importance of either rules or relationships, (2) individualism versus collectivism that pointed towards the functioning of people in an individual or group manner, (3) neutral versus emotional, which indicates the display of emotions, (4) specific versus diffuse that refers to how people maintain their personal and professional lives, (5) achievement versus ascription, which describes how status is obtained, (6) sequential versus synchronic that indicates how societies view time, and (7) internal versus external, which refers to whether people are controlled by the environment or the other way around. To explain briefly, universalism revolves around the principle that certain beliefs and practices may be applied in all settings without having to undergo alterations; on the other hand, particularism points out that factors related to a particular situation should influence how these ideas and actions are to be used. Therefore, universalist cultures tend to strictly follow a set of contracts and policies while particularist cultures are more focused on establishing a sense of trust through relationships. Meanwhile, cultures that have a high level of individualism include members who are responsible for their own decisions and are acknowledged for their individual success, thus a focus on accountability and decision making at the individual level. In contrast, cultures that take on a collectivist approach focus more on the community before emphasizing the individual; thus, successful accomplishment of goals, decision making, and carrying out of responsibilities are often done through groups. Next, neutral cultures strongly believe in hiding their emotions especially in public or during business transactions, maintaining composure all the time. Affective cultures, contrastingly, allow individuals to openly express their emotions such as being able to smile often or exchange enthusiastic greetings. Cultures that are achievement-oriented believe that an individual’s status is the function and outcome of his or her performance and achievement while ascription-oriented ones associate status with what or who an individual is such as through his age, gender, or family connections. Time orientation has also been identified as an important cultural dimension. Cultures that take on a sequential approach are likely to carry out one activity at a time, place much importance on punctuality, and prefer to strictly follow plans. On the other hand, those that have a synchronous approach demonstrate less importance on schedules and are more likely to perform multiple activities simultaneously. Finally, people who belong to cultures that are inner-directed believe that they control the results of their actions, hence having total control over their environment, while those in outer-directed cultures do not perceive such control as an important priority. Instead, they “go with the flow” and let their actions and decisions pave their own path, suggesting that their environment is in full control. Trompenaars’ (1993) set of cultural dimensions, I believe, is more detailed than that of Hofstede (1980). Initially, their findings were targeted to address various predicaments in the business context. These do not only highlight the overall attitudes of people; rather, specific situations can be addressed such as what should be done in a single business meeting or how important it is to express emotions. American and Chinese Cultural Differences A very important thing to consider in these theories on cultural diversity is their applicability on organizational settings. Let us take two different cultures, that of the American and Chinese, for instance. Comparing these two countries through Hofstede’s (1980) framework will entail the use of the five cultural dimensions. The index for individualism between these two cultures has yielded opposite results- a high score for the American culture and a low score for that of the Chinese. This will imply that Americans are more self-reliant and are concerned of their own welfare as well as of their loved ones; on the other hand, the Chinese take on a more collectivist approach which suggests that the Communist rule still binds them together as a community and enables citizens to demonstrate commitment and loyalty to each other. The American culture also measures a high level of masculinity, suggesting that gender role differentiation is evident and that men are known to dominate the social structure. However, a low score was attained for long term orientation which points out their need to carry out social obligations as well as their respect for traditions. Chinese culture, on the other hand, emphasizes a high level of long term orientation which means that they are cautious and are willing to persevere to overcome challenges in time. American culture revolves around a low level of uncertainty avoidance, hence, a smaller number of rules and fewer attempts in controlling outcomes. Due to this, members of this culture can be expected to be tolerant of various ideas and beliefs. Power distance for the United States has been shown to be low and this pinpoints to the likelihood that greater equality exists among collective groups, from families to government organizations. Such approach strengthens the interaction and cooperation among all levels and establishes a more secure cultural setting. In contrast, Chinese culture was found to have a high level of power distance, indicating how unequal distribution of power and wealth is widely accepted by the society as part of their cultural norms. These considerable differences between two cultures have implications for any organization that intend to incorporate both cultures into their workforce. First, cultural differences will result to conflict among employees and adverse organizational outcomes if cross cultural management is not effectively implemented. The need to train and inform employees from both parties with regards to each other’s culture is crucial before allowing them to work with each other so they can be given a clearer idea on what to expect from each other, how to respond, and how to act in certain situations. Considering these essential components for a culturally diverse workforce, the need for effective expatriate management is evident. It is also fundamental for organizations to determine and develop their future managers in order to prepare these individuals for global employment as a response to corporate needs. For expatriate managers to be able to attain success in a culturally diverse work environment can significantly influence the organization’s success regarding their international activities. Management roles that are based in a different foreign country often come with greater risks as it is necessary for expatriates to adapt to the new settings and lifestyle that may be completely new to them (Littrell, Salas, Hess, Paley, and Riedel 2006). There are also greater possibilities for failure compared to being assigned with the usual tasks and responsibilities in one’s home country. Because expatriate failure is associated with high costs, organizations should find ways to reduce such risks and select expatriates that who possess the most appropriate competencies and attributes that will contribute to their success. Role of Cross Cultural Training Because goal accomplishment and operational success of multinational companies are highly reliant on expatriates (Gupta and Govindarajan 2001), the role of training and development among expatriates remains to be a crucial component for the organizations’ overall performance. The main challenge of preparing individuals to function efficiently despite cultural differences in the international work environment has driven companies to adequately provide their expatriates with appropriate cross cultural training (Vance and Paik 2002). The body of knowledge that I have come across with regarding cross cultural training for expatriate employees has not been able to explain a single foundational theory for this concept. Nonetheless, a number of theories still aimed to explain the determinants and outcomes of such form of training. For example, the contingency theory on human resource training assumes that the link between training and learning remains to be of great significance for an increased likelihood in training efficiency as well as employee satisfaction, commitment, and participation in their workplaces (Kolb, Osland, and Rubin1995). Due to the fact that people demonstrate different needs and preferences, there is also a need to match the training approach and its content to such requirements such as the trainee’s learning styles. Research has also implied that the cultural differences demonstrated by the parent country and the host country are associated with the intensity of training necessary for expatriates- the greater the difference is, the greater the efforts for training should be (Hodgetts and Luthans 2000). We can say, therefore, that the contingency-fit existing between the instructors’ teaching strategies, the trainees’ learning styles, and the cultural distinctions perceived between parent and host country may have a positive impact on the success of expatriate training. In addition, the theory suggested by Black, Mendenhall, and Oddou (1991) puts forward the concept of expatriate adjustment that revolves around several dimensions- work adjustment, interaction adjustment with the host country’s residents, and general adjustments in the non-work surroundings. The statement itself provides assurance as to how this theory can be applied in any cross cultural setting owing to the fact that I have heard so much about our expatriates having considerable difficulty in adjusting to various factors such as the nationals of their host country or the environment outside of their workplace. The adjustment theory has also been strongly supported by many studies (Morley and Flynn 2003) as breaking down the concept of expatriate adjustment into several dimensions can significantly look into the expatriates’ experiences in their host country and how such encounters with their work, colleagues, supervisors, and the non-work environment can influence their effectiveness. The organization that I work for has been allocating expatriate assignments for over a decade now and this experience has taught me that the implementation of training among expatriates before letting them leave as well as after their arrival in the host country. Sequential training has also been provided for many of our expatriates and is implemented through several phases from the pre-departure period to their post-arrival phase. The pre-departure training for expatriates is the most common form of cross cultural training as it is fundamental that these working individuals enhance their cultural knowledge and develop new skills during the preparatory stage. Trainees, however, should have a high level of motivation when undergoing this form of training as those who do not perceive any benefit from going through training may not perform well (Selmer 2010). On the other hand, those who understand how difficult it is to live and work in a culturally different country are more motivated to learn and be trained. What is more challenging is when the expatriates end up with a set of stereotyped ideas about their host country that they may find unrealistic, thus the need for implementing cross cultural training that will help achieve certain changes in culture-related beliefs and practices. Post-arrival training has also been shown to be helpful in overcoming cultural dilemma; however, it has also been effective if we allow employees to absorb and cope with culture shock before being provided with follow-up training. Because the expatriate is most likely to have unstructured information regarding his/her experience upon arrival and the days that followed, providing training that will explain the host country’s worldly views, values, standards and patterns of living, social structure as well as overall conditions will allow them to put details and knowledge together. Equally important is the development of interaction skills that allow them to work independently and effectively while adjusting to their work and non-work environment (Mansour and Wood 2010). Preparations for expatriate assignments do not only rely on the duration of training; more importantly, the content should be consistent and well-matched to the host country’s culture and possible circumstances in their environment. Expatriate training must consist of opportunities to improve the expatriates cognitive, affective, and behavioral aspects such as their communication style to create strong relationships with people of a different culture and allows a certain level of understanding as language remains to be an inherent component of culture (Selmer 2006). Information about the overall environment from the climate and geographical location to education and government policies are also to be discussed along with business details that are relevant to the expatriates’ goal accomplishment. Those with managerial roles should be effectively equipped with skills for decision making, leading, controlling, and organizing all resources despite a new cultural setting. Personally, through our experience, the provision of adequate cross cultural training is the most significant priority when sending expatriates for international assignments. To identify the most appropriate cultural behaviors and practices that they should demonstrate can positively help them when performing tasks. This form of training also enables them to effectively deal with unexpected situations in a new cultural setting, thus the reduction of possible conflicts that can be brought about by unforeseen circumstances. Expatriates are also able to develop realistic expectations with regards to staying and working at a new cultural context (Harzing 2002). I believe that a lack in training will result to expatriate failures and returns with these working individuals not being able to perform to meet the required standards. If many companies are not able to perceive the positive outcomes of cross cultural training, I suggest that they place more efforts in identifying the most appropriate approach towards learning and skill acquisition as well as the necessary content in their training programs. Perhaps, the duration of their training is either too short or too long, or their expatriates are not motivated enough to learn. Conclusion Organizational leaders should identify the areas that should be improved the most with regards to their cross cultural management to ensure the success of expatriate assignments and avoid unnecessary costs. All these suggest how demanding it is to ensure the success of expatriates and carry out international operations. 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